Texas teacher retirement system sells downtown Austin property

The Teacher Retirement System of Texas has sold its longtime headquarters building on Red River Street in downtown Austin for $108 million. The buyer was Austin Real Estate Acquisitions LLC, a Delaware limited liability company and subsidiary of a publicly traded real estate investment trust. In a news release Wednesday, the retirement system — which manages nearly $185 billion in retirement assets for Texas teachers and school employees — said the purchase "completes an extensive competitive sale process to ensure the best value for the 3.8-acre property and buildings." The state agency has been based at the Red River campus for nearly 50 years. The two-building complex is located at 1000 Red River and has 198,972 square feet of space.

The sale closes another chapter in the retirement system's multiyear effort to address what it has said is a need for more office space. It is relocating its headquarters and main offices to the Mueller mixed-use development in East Austin. A representative of Austin Real Estate Acquisitions could not be reached for comment Wednesday, so it's unclear what the company's plans for the property might be. Real estate observers say the Red River campus is in an area that is transforming with new development, particularly in the life sciences and medical fields. Israel Linares, senior market analyst in Central Texas for CoStar Group, a commercial real estate data firm, said the property "is at the heart of what is now recognized as Austin's Innovation District," an area designed to drive collaboration among leaders in science, research and medicine. "The area is poised for an office redevelopment targeting life science tenants given its proximity to Dell Medical School," Linares said. Tenants also could be drawn to the site due to its proximity to the Waller Creek District, he said, where current redevelopment plans point towards new parks and improved greenways.