Relatively new firm is quickly stockpiling land in East and SE Austin.
PlaceMKR, a relative newcomer to the Austin real estate market, has acquired what is likely the largest industrial portfolio to change hands in the metro during the Covid-19 pandemic.
The real estate investment firm in July purchased a portfolio of properties along State Highway 71 in Southeast Austin totaling 14.7 acres and 145,000 square feet of flex industrial space from an entity connected to John McCall, owner of the beauty supply firm Armstrong McCall, according to PlaceMKR. The properties are 100% leased to Kyrish Truck Center, Ace Contracting Supply, Austin Speed Shop, Stainless Steels, Austin Community College and Casa Moreno.
Kyrish Truck Center is relocating to Burleson Road this month after selling its location at 4711 E. Seventh St. to developer Peter Barlin in October. Casa Moreno is relocating to the former site of Patsy’s Café at 5001 E. Ben White Blvd., which has closed permanently amid the pandemic.
The addresses are: 701 E. Ben White Blvd., 5010 Burleson Road, 3507 Chapman Lane, 3533 Chapman Lane, 4905-5001 E Ben White Blvd., 5005 E Ben White and 5109 E. Ben White Blvd.
“We identified this real estate portfolio because of its high concentration of local businesses that support the Austin economy,” PlaceMKR principal Christopher Cortese said in a statement. “While the fabric of Southeast Austin has been historically used for industrial purposes, we believe there are several factors that will shape a mixed-use narrative going forward including Tesla’s announcement of their plans to build the cybertruck Gigafactory.”
Industrial space is one of the fastest growing asset classes amid the pandemic as the demand for e-commerce and warehouse space in Austin has grown immensely while residents across the country have been sheltering in place for much of the last five months.
Amazon Inc. is leading the charge, leasing massive amounts of distribution space from Round Rock to Kyle. It has a 3.8 million-square-foot distribution center under construction in Pflugerville.
South of Austin, NorthPoint Development — a Kansas City, Missouri-based real estate developer — announced in August it has started construction on an 859,000-square-foot industrial park just west of I-35 in Kyle.
Experts also hope that Tesla Inc.’s forthcoming $1.1 billion plant along the State Highway 130 toll road will bring more industrial and other types of users to East Austin.
Cortese said PlaceMKR is considering redeveloping the property along SH 71 after holding it for five years to maximize its development potential. The firm is planning to conduct a feasibility study on what could be built there in the future, though he said industrial could remain a good fit.
“Having a lot of land we feel is a very valuable part of that acquisition,” he said.
The sale of the industrial portfolio was originally expected to close in late March, Cortese said, but that was delayed due to the uncertainty in the market because of the pandemic. He said it was the strength of the local tenants that brought PlaceMKR and the seller back to the table and close the deal.https://ef67e6f86b28145f0e7139de53d95215.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.html
About 45% of the square footage was becoming vacant as PlaceMKR had the property under contract, Cortese said, but they were able to re-lease the former Travis Roofing Supply buildings at 5010 Burleson Road and 5109 E. Ben White Blvd. to Kyrish Truck Center.
Austin-based PlaceMKR was founded in November 2018 as a “placemaking company, sort of pioneering areas where we think the market is moving,” Cortese said. That “path of progress” where PlaceMKR is focused on buying and developing properties is in East and Southeast Austin.
While PlaceMKR is relatively new, its principals, Cortese and Jesse Weber, are no strangers to real estate. Both are brokers with Newmark Knight Frank. Cortese is based in Connecticut while Weber serves as the senior managing director of the Austin office. Cortese and Weber have known each other for about 12 years. They founded a commercial brokerage company around 2010 in Connecticut, which later merged with Newmark.
PlaceMKR’s first Austin development project is a 65,000-square-foot creative office building under construction at 1141 Shady Lane. Construction is slated to be complete at the end of the year. Cortese said they have had interest from tenants but that no leases have been signed. The developers are looking at building out some spec office spaces. Bercy Chen Studio LP designed and is constructing the building.
Across the street from that project, PlaceMKR has also acquired property at 1142 Shady Lane for a 50,000-square-foot creative office building.
Cortese teased other upcoming developments such as apartments and a large mixed-use project that PlaceMKR has in the works. No plans for the projects have been submitted to the city of Austin for approvals just yet, and he declined to provide any details on what’s planned and where they will be located.
Read more: https://www.bizjournals.com/austin/news/2020/08/25/austin-placemkr-industrial-portfolio.html
Article by: Erin Edgemon