Texas capital

MFB plans $12 million office development in Texas capital

Jay Legg of MFB Real Estate and 5526 WUS Highway 290 West in Austin (MFB Real Estate, Google Maps, Getty)

A development project estimated to cost $12 million is on its way to Oak Hill, on the southwestern outskirts of the Texas capital.

MFB Real Estate plans to develop an office building at 5526 WUS Highway 290 West in Austin, according to a filing with the Texas Department of Licensing and Regulation’s Architectural Barriers Project, the division that administers compliance with the state equivalent of the Americans with Disabilities Act. .

The listed owner of the property is a company with the same address as Austin-based MFB, which owns and develops land and commercial projects in central Texas.

Plans for the four-story, 72,000-square-foot building include a four-story parking garage. SLG + Studio Architects is listed as a designer.

Plans for the Oak Hill property, however, could change significantly. Developers could look to a larger multi-family project instead of an office building, MFB’s Jay Legg told The Real Deal.

The property has an estimated value of $2 million in 2022, according to county records. State registration records show an estimated construction cost of $12 million, or about $167 per square foot.

Nine large Austin office buildings sold for an average price of $253 per square foot in the first quarter of 2022.

Office rent in Southwest Austin ranges from $35 to $55 per square foot, according to commercial real estate site Austin Tenant Advisors. Average asking rates for office rent in the city topped $53 per square foot in the spring of 2022, CBRE recently reported.

Nationally, several factors have contributed to a downward trend in office development – and in some cities, led to serious consideration of conversion from office to multifamily – the national trend is likely unrelated to the pivot MFB potential.

Austin’s office market has seen three straight quarters of positive net uptake, and the city has had the highest rate of office construction in the nation as a proportion of its inventory, according to a June CBRE report.