New office leases show Austin attractive to growing companies
Jan 16, 2009
Austin Business Journal
By Kate Harrington ABJ Staff
Two new Austin leases point to job growth at two companies and a rare glimmer of positive news in a down market.
San Diego-based game developer Sony Online Entertainment LLC and New York-based consulting firm Gerson Lehrman Group have signed leases that increase their presence in Austin, and both plan to add jobs at their Austin offices.
That news suggests Austin has the talent pool to continue its appeal with successful companies, real estate experts say.
Brand name a boost for market
Sony Online Entertainment is growing its local commitment by 56 percent with a move into 37,492 square feet of new space at Prominent Pointe II in Northwest Austin. That building is one of Aspen Properties’ two new projects in Northwest Austin.
Sony plans to make the move late this quarter from 24,000 square feet in Research Park Plaza IV. The transaction takes a large block of space in the Northwest Austin sector off the market and brings Prominent Pointe II up to 83 percent occupied, said Kevin Granger, partner with Stream Realty. Granger represented Aspen Properties, the landlord, in the transaction.
“Any time you can land a large brand name tenant like Sony, it’s good for Austin and good for the submarket,” Granger said.
Jay Lamy and Chris Perry, principals with Aquila Commercial, represented SOE in its search.
The northwest’s overall vacancy rate in 2008 was 12 percent, up from 8 percent in 2007, according to research from Oxford Commercial.
Other new tenants at Prominent Pointe in 2008 were Borland Software Corp. (Nasdaq: BORL), which signed a lease for 47,309 square feet, and GE Security, which signed a lease for 13,474 square feet.
Matt Slagle, a spokesperson for Sony, said the company made the move to a larger space because the team working on a new game, DC Universe Online, is growing. Slagle declined to say how many people SOE will hire, what time period the new employees will come on board, or whether Sony is hiring people affected by recent layoffs among Austin gaming companies.
Slagle said layoffs planned at Sony Corp. (NYSE: SNE) do not apply to Sony Online Entertainment.
In December, Chicago-based Midway Games Inc. closed its Austin studio, eliminating its remaining 45 jobs. Midway had cut about 90 workers last August, along with NCSoft North America, which cut 21 developer jobs in August.
Downtown space aids recruiting
Gerson Lehrman is continuing its Austin growth with a lease to renew its 19,671-square-foot location at 301 Congress and expand its presence by an additional 10,000 square feet. The expansion takes the company to just under 30,000 square feet of occupancy and makes Gerson Lehrman the largest tenant in the building.
The company established an Austin presence in 2005, and since then has grown from eight employees to 185. The company plans to add 40 to 50 new jobs to its Austin office over the next few years, said Andrew Goldman, a spokesman for Gerson Lehrman.
Jerry Frey, senior vice president, and Robert Meyers, first vice president of CB Richard Ellis Inc., represented the tenant, and Bart Matheny and Chad Barrett of Aquila Commercial represented Hines Interests, the landlord in the transaction.
Frey said Gerson Lehrman considered taking space in a suburban location, but felt the downtown space would help the company with employee retention and recruitment.
“By extending their lease, it’s further evidence of their commitment to the Austin market,” Frey said. “I think it’s a pretty interesting transaction. A lot of people are pulling in their horns, and this company is financially sound. They’re adding new jobs.”
kharrington@bizjournals.com | (512) 494-2523
