News Summary
Austin is witnessing significant growth in its medical office sector, spurred by a 2.3% population increase. The acquisition of a former AT&T call center is transforming into medical condos, attracting local healthcare providers. Renovations are currently in progress, and the demand for healthcare services continues to rise with the city’s increasing population. This growth positions Austin as a key hub for healthcare services in Central Texas.
Austin is experiencing a robust growth in its medical office sector, a development closely tied to the city’s significant population increase. According to the latest U.S. Census Bureau data, the Austin metropolitan area ranked third nationally in population growth last year, with a rise of 2.3%. This demographic shift is boosting the demand for healthcare services and is creating favorable conditions for medical office facilities.
The Austin medical office market has been characterized as being on solid footing, thanks to the influx of new residents seeking medical care. One recent notable development is the acquisition of a former AT&T call center located at 4544 South Lamar Boulevard. The facility, comprising 110,300 square feet, was purchased by Buchanan Capital Partners and B3 Commercial in early June. The acquisition was made at a steep discount from an LLC linked to Legacy Partners, though the specific purchase price has not been disclosed.
Following the acquisition, the site is being transformed into medical condos. Early buyers include Austin Gastroenterology, which purchased a 31,400-square-foot space, and Southwest Dermatology and Vein Clinic, which acquired 10,000 square feet. The first set of buyers benefited from discounts of up to 40% on the medical condos, making it an attractive opportunity in an otherwise challenging office market.
Currently, approximately 68,300 square feet of divisible space remains available for purchase, with remaining condos priced at $335 per square foot. This pricing is significantly lower than comparable properties in the area, which often sell for around $500 per square foot. The available spaces are cold-shell properties, allowing prospective buyers to customize them according to their requirements. The upper floor has ceiling heights of 15 to 16 feet, making it particularly suitable for medical clinics and surgery centers, while the lower level can accommodate various commercial uses, including daycares, gyms, and creative flex offices.
Renovations on the exterior of the property are currently underway, with the project being managed by McKinney York Architects. The purchase decision was partly influenced by challenges in the wider office market, which has been grappling with record-high vacancy rates since the pandemic began. Many office landlords are choosing to sell properties at a loss to avoid the threat of foreclosure, leading to a shift in dynamics within the commercial property landscape.
Although office-to-residential conversions are gaining traction in other regions, such endeavors are less feasible in Austin due to a scarcity of older office properties suitable for such transformations. An example of a successful repurposing initiative is NexPoint Advisors, which is developing the former Electronic Data Systems campus into a $4 billion life sciences and medical center in Plano, Texas.
In addition to private sector developments, significant enhancements in healthcare delivery are being made through new hospital facilities. Baylor Scott and White Health opened its first hospital within Austin city limits on January 15 at 5251 W. U.S. Highway 290. This new medical center features a multispecialty medical clinic that commenced services in October, in addition to a full-service hospital that provides 24/7 emergency care, an intensive care unit, and fully equipped operating and imaging rooms.
The establishment of this hospital aims to improve healthcare delivery and community wellness in the Austin area. It complements the existing network of seven full-service hospitals in Austin and Round Rock, along with approximately 70 clinics serving residents in Travis, Williamson, Hays, Bastrop, and Caldwell counties.
As the medical office sector continues to thrive amid rapid population growth and new healthcare developments, Austin is positioning itself as a vital hub for healthcare services in Central Texas, catering to the evolving needs of its burgeoning population.
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Additional Resources
- The Real Deal: Buchanan B3 Turn Austin Office Building into Medical Condos
- Wikipedia: Austin, Texas
- KVUE: Austin Medical Center Baylor Scott & White
- Google Search: Austin Medical Office Market
- CoStar: Austin Texas Medical Office Market Defies Broader Market Trends
- Google Scholar: Austin Medical Development
- Austin Monitor: St. David’s Snags Planning Commission Approval
- Encyclopedia Britannica: Medical Developments in Austin
- Ocala: Ribbon Cutting Ceremony for AdventHealth Ocala Medical Office Building
- Google News: Austin Medical Facility Growth
Author: STAFF HERE AUSTIN WRITER
The AUSTIN STAFF WRITER represents the experienced team at HEREAustinTX.com, your go-to source for actionable local news and information in Austin, Travis County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as SXSW, Austin City Limits Music Festival, Formula 1 United States Grand Prix, and the Austin Film Festival. Our coverage extends to key organizations like the Greater Austin Chamber of Commerce and Visit Austin, plus leading businesses in technology, automotive, and retail that power the local economy such as Dell Technologies, Tesla, and Apple. As part of the broader HERE network, including HERECollegeStation.com, HEREDallas.com, HEREHouston.com, and HERESanAntonio.com, we provide comprehensive, credible insights into Texas's dynamic landscape.
