AMD Sells and Leases Back Lone Star Campus, Generates $164M in Cash

By Camelia Bulea, Associate Editor

Advanced Micro Devices Inc. is close to signing a sell-and-leaseback deal that is expected to generate approximately $164 million in cash. The technology company recently announced in a news release that an affiliate entity of real estate investment company Spear Street Capital agreed to buy the property at 7171 Southwest Pkwy. Once the deal closes on March 26, AMD will enter a 12-year lease for the 812,350-square-foot complex, according to the Austin Business Journal. The tenant will have the option to continue its operations on the campus after 12 years if it chooses.

“The sale of our Austin campus will unlock a significant amount of capital, while the multi-year leaseback of our Austin campus reconfirms our long-term commitment to the city that so many AMD employees have called home since 1979,” said Devinder Kumar, chief financial officer of AMD. The company also has offices in Sunnyvale, Calif. and Markham, Ontario, but the Austin campus is the biggest of the three. AMD has around 1,900 employees in Austin.

The Business Journal reports that AMD would pay about $21 million in rent during the first two years. Additionally, the company expects to record circa $50 million in the first quarter of this year, a sum related to the difference between the sale proceeds and the carrying value of the property, according to an official statement by AMD.

Sell-and-leaseback practices are used by companies that want to raise money very quickly without having to disrupt their business. AMD seems to prefer this kind of practice, as its headquarters in Sunnyvale is also currently under lease. Moreover, in 2008 the company sold its big site in Ontario, Canada under a similar lease agreement.

Image via Flickr user James Cubed Design

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Foundation Communities Plans 109-unit Affordable Project

By Camelia Bulea, Associate Editor

Foundation Communities plans to build a residential project with affordable units at 2800 S. Lamar Blvd.—a booming area with upscale multifamily projects. The local nonprofit could build the 109-unit project on a site that currently houses a Goodwill retail store.

The entire project, called Skyview Studios, would cost $15 million to build, out of which the developer hopes to receive $10 million in federal tax credits, according to The Austin-American Statesman. If the project receives the credits, the Austin City Council will contribute with $1.8 million to fund the project. The rest of the money needed to build the community would come from fundraising.

The four-story building is planned to have a new 14,000-square-foot Goodwill store on the ground floor and more parking lots than the initial store – a total of 60 spaces. Monthly rates would range between $400 and $650 a month including utilities, said Walter Moreau, executive director of Foundation Communities, as quoted by the The Statesman. Skyview Studios, with units of about 400 square feet, will target individuals with annual incomes under $26,000.

If all goes according to plan, construction could begin in the spring of 2014, with completion expected to happen a year thereafter. When complete, Skyview will be the sixth apartment community developed by Foundation Communities in Austin—with a total number of 600 affordable units.

The project has received a lot of support from philanthropists and different local associations, being one of the few current developments to provide housing for low-income people in Austin. Although the city is booming with apartment projects, most of the multifamily communities planned in the area offer luxury units and not enough affordable ones.

Photo rendering of Capital Studios, another affordable project developed by Foundation Communities in Austin

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327-room Boutique Hotel to Break Ground This Summer in Downtown Austin

By Camelia Bulea, Associate Editor

JMI Realty is finally able to look forward its 327-room hotel project in downtown Austin. After five years of being stalled due to the economic recession, the hospitality project is now on track—expected to break ground by June 2013.

The 16-story hotel will be operated by Kimpton Hotels—a San Francisco company that specializes in chic boutique hotels, notes the Austin Business Journal. The building will also include a three-level underground parking garage, three-meal restaurant, 6,800-square-foot pool deck and bar, about 12,000 square feet of meeting space, and a 1,300-square-foot exercise facility.

Dubbed Hotel Van Zandt, the initial 2008 project included a 29-story hotel and residential tower, which would have required a $100 million investment but was scaled back to a 346,000-square-foot hotel designed by Dallas-based WDG-Habib Architecture Inc.

According to JMI Realty, the Van Zandt will be the only boutique hotel in downtown Austin and is designed to capture the unique attitude and culture of the community. Given its location two blocks southeast of the Austin Convention Center, one block east of Town Lake and 1.8 miles from the Texas Capitol Building, the hotel will be appealing for both business and leaisure travelers.

Austin is a booming hotel market with many hospitality projects under construction this year. Back in January, Hotel ZaZa developers received initial approval from the Austin City Council to proceed with their 24-story hotel project.

Additionally, the $350 million Fairmont Austin is scheduled to break ground in October 2013. When complete in 2016, the 50-story, 1,000-room hotel will be Austin’s second tallest building.

Photo credits: JMI Realty

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National Instruments Considers Major Investment in Austin

By Camelia Bulea, Associate Editor

National Instruments Corp. is considering adding 1,000 jobs to its Austin headquarters over the next 10 years and an $80 million investment to the Texas capital. The engineering toolmaker plans to expand its research and development by building a new $47 million facility and investing $33 million in business equipment, reports the Austin Business Journal.

In exchange, the company could get $1.7 million in performance-based city tax breaks if the Austin City Council approves a deal. If approved, the state will provide $4.4 million through the Texas Enterprise Fund. The average annual salary for the new positions is $72,223, according to its incentives application with the city and as reported by the Austin American-Statesman.

According to documents released by the city of Austin, the deal could generate a net benefit of $7.6 million, including the incentive. For the moment, the company is also considering another option for this deal outside the U.S. in Penang, Malaysia, reports the local publication.

If the company chooses Austin, plans call for a 300,000-square-foot facility on 8.5 acres adjacent to its North Austin headquarters off Mopac Expressway. Construction on the new facility is expected to start on July 1.

National Instruments is an important employer in Austin, currently staffing about 2,273 in the city. Additionally, it works with 3,500 Central Texas students each year. The Austin City Council is scheduled to be briefed on the project Feb. 28 and vote on the incentives offer March 7.

National Instruments campus in Austin, courtesy of Wikipedia.org

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JV to Deliver New Luxury Apartment Tower in Downtown Austin

By Camelia Bulea, Associate Editor

StreetLights Residential and Hunt Companies Inc. have formed a partnership that will build a 19-story glass and brick tower at 214 Barton Springs Rd. just south of the Hyatt Regency Austin. The project is valued at $68 million.

Designed by Austin-based Rhode Partners, the luxury multifamily project will feature 300 apartment homes with high-design elements modeled after a boutique hotel. The apartments will average 900 square feet in size, according to an official statement by Hunt Companies Inc.

“This property will represent well-crafted urban architecture, interiors, landscape, art and technology,” said Doug Chesnut, CEO of StreetLights Residential. Due to the beautiful location of the property, residents will be able to enjoy panoramic views of Lady Bird Lake, the downtown skyline, the State Capitol and West Hills.

The new tower will feature high-end amenities such as a boutique hotel-style lobby with intimate conversation areas and a coffee bar, a resort-style pool deck with skyline views, a spacious fitness center, and a rooftop lounge.

The project owner is SLR Residential at Barton Springs, whose members are Hunt Development Group LLC and Hunt Barton Springs—both affiliates of Hunt Companies Inc., as well as SLR Residential at Barton Springs LLC—an affiliate of StreetLights Residential.

According to the Austin Business Journal, construction should begin in the spring, with a completion date set for August 2014.

Due to the high demand for new rental units in Austin, several other multifamily projects are currently under construction in the downtown area, as reported by the Business Journal:

• SkyHouse Austin at 512 Rainey St.
• Gables Park Plaza II at 111 Sandra Muraida Way
• Whitley apartments at 301 Brazos St.

Image rendering of the high-rise tower, courtesy of www.streetlightsres.com

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