Article provided by: The Austin Business Journal
Cielo Property Group continues its commercial real estate offensive in downtown Austin with the acquisition of 900 Congress Ave.
The company said Monday it closed on the five-story office building in the shadows of the Texas Capitol. Last week Cielo, founded in 2010 by local real estate investors Rob Gandy and Bobby Dillard, announced its new development in East Austin named "The Foundry."
The purchase price of 900 Congress was not disclosed, but the Travis Central Appraisal District pegs the valuation at $5,132,409 — an amount that's likely on the low side, given that the property includes ample off-site accessory parking and a significant opportunity to renovate and raise rents.
"Close proximity to the Capitol has always been an advantage for this building," said Branigan Mulcahy, vice president of investments for Cielo.
Gandy and Dillard began acquiring downtown Austin properties for Cielo in 2013 with the historic building in the 300 block of Congress above Annie's Cafe & Bar. The next year, Cielo purchased 823 Congress Ave., which is across the street from its newest acquisition. The company also owns 220 S. Congress Ave., where Yeti Coolers is planning a retail store, according to several sources.
Cielo also is gearing up for a major new build in downtown Austin. The company will demolish the Austin Music Hall and create a 29-story office tower at 601 W. Third St. Dubbed "Third + Shoal," the tower is expected to break ground later this year.
The 900 Congress property has an interesting history. Originally, it was classic Art Deco vintage dating back to the 1920s. In 1943 the building was a Sears Roebuck department store, according to published reports. The current iteration was built in 1965, according to tax records.
Prosperity Bank is a major tenant with signage rights. Cielo did not disclose the occupancy at the time of closing. Tax records show a medley of tenants from attorneys to nonprofit organizations to corporate entities such as AT&T Mobility. A sign on the exterior of the building says an entire floor is available.
Cielo also did not indicate the seller or brokers involved. Records at the Travis County Clerk's office show the former owner as 900 Congress I Ltd. with Randy L. Wright as president.
Cielo plans to upgrade and modernize the building with streetscape improvements — yet enhance the historic elements.
"With the renovations Cielo has planned for 900 Congress, this building will add more creative, modern office space in the heart of downtown," said Bethany Perez, a principal with Aquila Commercial.
Gandy sees the potential for appealing to a different breed of tenant.
"Not everybody wants to be in new high-rise construction and 900 Congress offers a great alternative," he said.