ATX Real Estate News | February 7, 2019 by Jan Buchholz
Brickman, the New York-based real estate investor, is particularly adept at identifying older multi-tenant office buildings that yearn for tender loving care and giving them a fresh start.
823 Congress, a 16-story, 1971 office building, is Brickman’s latest makeover in Austin. Previously, Brickman gave Lavaca Plaza, 504 Lavaca St., a radical facelift before selling to Seattle-based Unico in January 2015.
After that sale I didn’t think Brickman would stay in the Austin market, as value-add opportunities had grown scarce. Brickman, however, discovered a diamond in the rough at 823 Congress.
Since purchasing the property in October 2016, Brickman has updated all aspects of the property — from the barebones infrastructure to the vibe around the perimeter.
Brickman also embraced an innovative strategy — finishing out spec office space with the hope of appealing to a company that doesn’t want the hassle of overseeing design and construction. Very likely, there are other companies that simply require office space tout de suit — without delay.
“Tenants want something new and pretty that they can be proud of, but (some) are deathly intimidated by the construction process,” Brickman’s Paul Kotcher said. “It’s a lot of work, so we take the risk up front.”
In the case of 823 Congress, Brickman has built out the entire 12th floor, and now a company — as yet unidentified — is under contract for that space.
“What we’ve done on the 12th floor speaks volumes about our work,” Kotcher said.
The Brickman team is adept at assessing variables, he added — knowing when to build out 1,600 square feet or when to finish out two full floors.
Another Brickman strategy? Engaging tenants before they open the door to the lobby. Thus, two local food truck favorites — Chi’lantro and Garbo’s — were recruited to the pocket park outside.
Other appeal has been achieved with new signage, a renovated lobby, new elevator cabs, a communal conference room, a new fitness facility with showers and lockers and a tenant lounge.
The recent announcement that Industrious has leased 24,000 square feet also is working its magic on would-be tenants who want to be associated with the coworking powerhouse.
Though Brickman and Industrious both are based in New York with operations in multiple U.S. cities, this is the first lease deal between the two.
“The building’s redevelopment plans and proximity to downtown amenities, shopping, and dining options were extremely appealing. Our members will love it,” said Troy Volkel, Industrious’ real estate manager.
Kotcher anticipates Industrious will draw its usual maverick clientele along with government lobbyists and public affairs personnel who must be near the State Capitol.
He’s keen on what Industrious brings to the 823 Congress tenant mix.
“Industrious is a good fit for us,” Kotcher said.
Brickman’s listing company, ECR, believes the Industrious cachet provides an inducement for other tenants.
“We are ecstatic to have Industrious … as we have been fans of theirs since they opened in Austin,” said ECR partner Jason Steinberg. “They are well-respected in the Coworking industry, and we found early-on in the lease process that their vision and plans (are) very compatible with Brickman’s strategy and plans for repositioning 823 Congress.”
Industrious expects to finish the 823 Congress location in the third quarter.
Meanwhile, Brickman still has its sights across Austin.
“We’re actively looking in Austin. There are good fundamentals here,” Kotcher said.
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