905 Howard

Off market acquisition of a 100%-leased industrial asset located in the best industrial submarket in Austin. At acquisition, the building was fully leased at below-market rates to two Fortune 500 tenants. Due to a lack of available land sites and increasing construction costs, development in the area is mainly focused on office and multifamily projects. 905 Howard presented an opportunity to invest in a fully leased asset in one of the most desirable areas in Austin at an attractive cap rate. Our business plan was to complete practical improvements at the property and renew leases with existing tenants at market rates.

Within 12-months of acquisition, Stream began to see the capital markets in Austin perform similarly to the more established markets surrounding it. As a result, Stream took the building to market in September 2020 and received offers from 14 institutional buyers. The top contenders did not have assets in Austin and wanted to gain exposure to the city. After four rounds of offers, Stream awarded the deal to an institutional investor at a price equivalent of a 4.52% cap rate. The high purchase price and low cap validated the Stream team’s thesis on the capital market demand shift in Austin, as well as the potential of releasing the building at higher rates in three to four years.