AUSTIN, TEXAS — Cousins Properties (NYSE: CUZ) is under contract to acquire Sail Tower, a trophy office building located at 601 W. 2nd St. in downtown Austin. The Atlanta-based REIT agreed to a net purchase price of $521.8 million for the 804,000-square-foot property.
Sail Tower was delivered in 2022 and its offices are fully leased to a Fortune 20 company through 2038, according to Cousins. The tenant name was not disclosed, but multiple media outlets report that Google is the occupant.
The seller was also not mentioned, but Dallas-based Trammell Crow Co. developed the tower, which was formerly known as Block 185.
The name “Sail Tower” derives from its curved appearance. The LEED Platinum property is situated near Austin’s Second Street entertainment district and offers unobstructed views of Lady Bird Lake.
“We are thrilled to add this iconic office property, with a strong investment grade customer, to our Austin portfolio,” says Colin Connolly, president and CEO of Cousins. “This exciting transaction enables Cousins to enhance the quality of our leading lifestyle office portfolio and is immediately accretive to earnings.”
Cousins’ existing downtown Austin office portfolio is situated near Sail Tower and is currently 93 percent leased. The assets include 300 Colorado, Colorado Tower, San Jacinto Center and One Eleven Congress. The company also owns office properties in Austin’s Domain district.
According to Cousins’ investor presentation on the transaction, Sail Tower’s rents are “below market” and the purchase price is well below replacement cost. The transaction is expected to close this month, subject to customary closing conditions.
Founded in 1958, Cousins primarily owns and acquires office assets in Sun Belt markets, including its recent $328.5 million acquisition of Vantage South End in Charlotte. The company’s stock price closed on Monday, Dec. 9 at $30.99 per share, up from $22.52 a year ago, a 37.6 percent increase.
— John Nelson