Project near Capitol illuminates art of retrofitting old offices with rooftop terrace, tree-shaded courtyard

It’s been nearly a year since Dallas-based Prescott Group purchased the historic Texas State Teachers Association building just west of the State Capitol.

Despite being an arduous retrofit of a chunky concrete structure, Prescott Group and its team of builders, engineers and designers is making substantial headway in creating a modern, light-filled Class A building that will provide about 100,000 square feet of multi-tenant office space by the end of the year.

Brian Leslie and David Dierkes, managing director and senior director of Prescott Group, gave me a tour of the property recently, recapping details of how the unique deal came together.

The real estate investment company, which particularly relishes value-added renovation projects, had been shopping around Austin for some time. The company almost initiated its first foray into Austin with the Saint Elmo Market District — a mixed-use project with retrofit characteristics in South Austin.

But the developer decided to pursue another partnership — it was a cordial parting — and Prescott Group checked in with Walter Saad, a capital markets expert then with CBRE Group Inc. and now with HFF. Saad was marketing the Capitol-area property — portions of which date back to 1950 — on behalf of the Texas State Teachers Association, which decided to sell and move to North Austin.

Prescott Group jumped at the opportunity.

“It was all kind of appealing to us,” Leslie said.

Of course the due diligence process presented a legion of puzzles to be solved. Many investors and developers shun the hard stuff, such as working within the confines of an existing footprint, old materials and obsolete floorplans. Prescott Group revels in the restraints.

In the past the company renovated a 1923 Art Deco property in Dallas into The Stoneleigh boutique hotel. The possibilities for reviving tired office buildings — in Dallas, Fort Worth and Tulsa mostly — energizes the Prescott team.

In early March 2016 the sale was completed. No purchase price has ever been disclosed, though the Travis Central Appraisal District most recently valued the property, which sits on 1 acre, at $12.5 million. Dierkes said the renovation and expansion of the property is valued at $10 million.

Prescott Group retained Andersson-Wise Architects to handled the design, even though the two companies had never worked together before.

Leslie said the company was introduced to veteran architect Arthur Andersson by way of the Saint Elmo project and was duly impressed.

What evolved is an illuminated jewel box — a radical departure from the original bunker styling. Yet, the bones of the property are completely retained with floor-to-ceiling glass panes extending beyond the original frame — thus adding more square footage. Another bonus — the property originally was entitled for six floors, but only five were ever built.

The Burt Group, which has a history of handling confounding, large scale renovations, is the general contractor.

A new level is being added along with a rooftop terrace, which includes one of the most enviable views of the State Capitol. The panorama toward the Hill Country is pretty inspiring, too.

JLL has the assignment to find tenants.

Rachel Coulter of the brokerage team expects law firms, lobbyists and financial services companies will be eager to learn more — especially given that the property will have a fitness center, showers, bike storage, building conference room, structured parking and an outdoor courtyard shaded by an expansive live oak tree.

“Some 400,000-square-foot buildings don’t have the amenities that will be here,” Coulter said. “(Prescott Group) really pays attention to the details.”

Other companies involved in the project are Big Red Dog Engineering Consulting and Sixthriver Architects, which is handling interior design. Ryan Ridgeway with Stream Realty Partners is seeking an operator for the street level restaurant space.

Procore ramps up in Austin after finding success where tech, real estate meet

Procore Technologies Inc. — a Santa Barbara, California-based company that recently landed on Forbes’ 2016 billion-dollar startup list — is amplifying its Austin profile.

The cloud-based construction management software company recently moved into about 18,000 square feet on the 18th floor of Chase Tower at 221 W. Sixth St. after spending three years in co-working spaces, most recently at WeWork.

“Procore is becoming really valuable to large companies, but we can really provide a leg up for smaller contractors,” said Doug Madey, Procore’s director of communication.

Austin’s deep pool of tech talent prompted Procore to open an Austin operation in June 2013 with one person — Jeff Kemper — and now the local operation is up to 50 employees. The new space can accommodate 50 more, Madey said.

The rapidly growing company also recently secured $50 million in funding, lifting its total capital investment to about $179 million. San Francisco-based Iconiq Capital led the most recent fundraising effort. Procore expects to deploy its latest capital round to deliver more programs and expand internationally.

CEO Tooey Courtemanche founded the company in 2003 in Silicon Valley after learning the ins and outs of the software business.

His entry into the construction field began while building a new home for his family. He was stunned by the lack of coordination among the people he had hired. Just a decade ago, the construction business was decidedly low tech. Many companies simply didn’t know how to use technology effectively.

Courtemanche started with a web-based collaboration tool, and he acknowledged in comments on the company’s website that it was slow-go for years. Other software developers also tried to infiltrate the construction industry, but the 2008 economic upheaval put the nail in the coffin of many of those businesses.

Procore survived and thrived with patience and perseverance. The company touts itself on its site as “The #1 most widely used construction management software.”

Many of the giant construction companies still operate their own technology systems, but Madey said they are expensive to maintain.

Procore, he said, manages the entire process, ensuring that the smallest details are covered. Delivering the right materials at the exact time, for instance, can equate to thousands of dollars in cost efficiencies.

“Everybody is recognizing the benefit of cloud technology,” Madey said.

Cresa Partners represented Procore in its search for office space. Sixthriver Architects created the design, and The Burt Group handled construction.

The Burt Group is a leading Austin-based commercial general contracting firm.