Starwood Capital Group unwound its Austin office holdings, selling the last asset in a four-property portfolio that hit the market earlier this year.
The Florida-based investment firm sold Cielo Center — a three-building, 286,000-square-foot campus at 1250 South Capital of Texas Highway in West Lake Hills — to a joint venture of Aquila Commercial and Serpa Partners last week, the Austin Business Journal reported.
The deal closed the book on a portfolio that once totaled nearly $200 million.
The Cielo Center was the final piece to trade for Starwood after sales this year of the firm’s other three Austin assets: The Park on Barton Creek, Encino Trace and The Crossings at Lakeline.
Terms for the Cielo deal weren’t disclosed, though the property’s taxable value was assessed at $35 million, or $122 per square foot.
Aquila Managing Principal Chad Barrett confirmed the transaction and said the complex is 86 percent leased.
Cielo Center is Serpa Partners’ first investment, and the firm’s leadership framed the acquisition as a strategic debut. The campus aligns with Serpa’s focus on “differentiated assets in growth markets,” pointing to a hands-on repositioning strategy the joint venture plans to deploy, Serpa Managing Partner Michael Provost told the outlet.
Interior common areas and outdoor amenities are first up for renovation, with Aquila’s team — Barrett, Max McDonald and Cody Schneider — taking over leasing.
The venture is buying into one of Austin’s healthiest pockets for office space. Located off South Capital of Texas Highway near the South MoPac corridor, Cielo Center sits in the Southwest submarket, where vacancy was just 13.2 percent in the third quarter, well below the metro’s 17.1 percent rate, according to Aquila. That stability has made the area a standout amid a broader office market still recalibrating to hybrid work and elevated borrowing costs.
While institutional investors spent the last decade piling into Austin office deals, many are now pruning portfolios or offloading stabilized assets to refocus on sectors with more predictable returns.
Buyers of Starwood’s other Austin properties included Los Angeles-based BH Partners, which bought The Park on Barton Creek in April. Cross Ocean and OakPoint bought Encino Trace in August. And Continental General Holdings bought The Crossings at Lakeline, where it’s been a long-term tenant.
— Eric Weilbacher
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