la Frontera In the News

Austin Business Journal
Commercial Real Estate Awards

March 28 - April 3, 2003

301 Sundance faced a tough and tight market

by Kate McVey, Austin Business Journal Staff

It wasn't the best time to build a first class office building on "spec" in the Austin area, but build it they did. Then the broker team at Kennedy Wilson rolled the dice once again when it came to finding a tenant -- and won a buyer instead.

Kennedy Wilson developed 301 Sundance, a three-story class A office building in La Frontera, a master planned mixed use development in Round Rock with Fortis Life Insurance Co. as its financial partner. But by the time the building was complete, the economy was in decline in the Austin area and across the nation.

"The market was lousy," says Phil Capron, senior managing director at Kennedy Wilson. "The atmosphere was one of declining market expansion, particularly in high tech."

An office building of more than 290,000 square feet was planned with the needs of the high tech industry in mind. It included technological advances such as a dual-feed redundant fiber loop to service the building, along with redundant electrical service from two separate substations.

"We designed the building to meet the demands of tenants in the "super '90s" says Mike Looney, one of the five broker team members for the project. "There are no columns, [but] big floor plates and plenty of parking to accommodate a call center or another large user."

To that end, the interior features 65,000-square-foot floor plates with 100-pound live load floor capacity and 42-foot bay depths and column-free space.

Then there was a 708-stall parking garage, designed to be expanded one additional level.

Kennedy Wilson planned the 7.2 acre building site to take advantage of the entire La Frontera park, with access to its retail, hotel and recreational amenitites.

Kennedy Wilson put together a full team to create what Capron describes as "the best building in town" -- architect Robert Burns of Susman Tisdale Gayle, general contractor Zapalac/Reed Construction Co. and Brown McCarroll for its legal needs.

Although built using traditional architectural site-cast concrete, blue reflective spandrel glass was used on the exterior to create a "distinctive and architecturally appealing elevation."

"We designed it with a lot of amenities," Looney says. "Lots of light, lots of windows -- we wanted everyone to have natural light if possible."

Along with all of the windows and light, attention was paid to energy efficiency as well. Features include dual-pane reflective vision glass, parabolic light fixtures with T-8 lamps and a single-ply reflective roof membrane.

Efforts to find a tenant started even before the foundation took shape. As with other large projects, Capron, Looney, David Alsmeyer, Steve Eller and Michael Boykin worked as a team during development and marketing of the building.

"We were going full bore on marketing from the day concrete was poured," Looney says. "We intended to lease the building, not sell."

But sell they did -- and in the face of fierce competition.

"Competition was so fierce, we didn't relax our leasing efforts at all," Looney says -- even when a possible single tenant showed up on their doorstep.

Looney says they were working with a number of tenants that would each take part of the class A building when a broker called inquiring about the building's availability for a single tenant. The Kennedy Wilson team hadn't gone too far down the leasing process at the time and had told each one that one tenat might take all of the building.

"But there are a lot of pressures when you're going for a home run while passing on the singles" Capron says. "It was a real gut difficult decision to throw the small fish back with the hope of finding a larger one."

But 301 Sundance proved to be the choice for Texas Guaranteed Student Loan Corp. and its employee workforce of up to 800 people. It is now the owner and sole occupant of the building.

Capron and the Kennedy Wilson team credit the cooperation of its lender, Bank One, and Round Rock officials for the success of the project and its sale.

"Round Rock officials bent over backwards to cooperate -- not so much in tax incentives as it was the attitude. There were so many in our corner, including the La Frontera developers. It was a group effort and not just in economics -- it was an overall attitude of flexibility."