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Facebook Linked to Major Lease for Entire 17-Story Austin Office Tower

Social Media Giant Reported as Mystery Fortune 100 Tenant Behind Austin's Latest Major Office Deal
September 6, 2018
If Facebook is the Fortune 100 firm behind the full-building lease for TIER REIT's Domain 12 (shown above) it will be the social media firm's second location in the north Austin office complex. The firm already leases over 100,000 square feet in the nearby Domain 8 building.

Social media giant Facebook could be the mystery tenant behind a "strictly confidential" big lease totaling 320,000 square feet, spanning 17 floors at the soon-to-be-completed Domain 12 office tower in Austin.

Dallas-based real estate investment trust TIER REIT is developing the building at 3110 Esperanza Crossing slated for completion in December 2019. That's when, presumably, Facebook employees could potentially move into the space.

However, those details were not immediately available on Wednesday after TIER declined to comment beyond an earlier announcement it issued confirming it had completed a lease with a Fortune 100 company for the entirety of its Domain 12 building, adding that the terms of the lease were "strictly confidential."

Citing multiple industry sources in the state's capital, the Austin American-Statesman ran a story linking Facebook to the earlier announced lease. In response to a request for comments from CoStar News, a Facebook spokesman for the company’s Austin operations said the company didn’t have "anything new to share about our facilities in Austin at this time."

Facebook Inc. does happen to be a Fortune 100 company, ranking at No. 76 on the publication's list, and has a large, growing presence in Austin.

Along with announcing the full-building lease deal, Scott Fordham, TIER REIT's chief executive, confirmed strong tenant demand for the next building planned in The Domain development, and confirmed in a statement that his company plans to begin construction on the next office tower in the project.

"In addition to fully leasing our Domain 12 development project more than a year in advance of its anticipated completion, we believe we are well-positioned to commence development of Domain 10 next month with letters of intent exceeding 350,000 square feet," said Fordham in a statement.

In an at-the-market equity offering program, TIER REIT raised $130 million in gross proceeds this year, which is expected to help the REIT to fund its development activities. Domain 10 is a 300,000-square-foot office building planned for a site adjacent to its other Domain towers in Austin.

"Looking beyond Domain 10, we are fully designed and entitled at Domain 9, a 330,000-square-foot prospective development that can accommodate additional office demand within The Domain," Fordham added.

TIER REIT is developing the project with the help of Austin-based Endeavor Real Estate Group, the firm that is overseeing leasing and management of Domain 12. Gensler is the project architect.

The Texas state capital's technology scene has been growing as companies on the East and West Coast see the Lone State state as an affordable option in recruiting new employees.

Earlier this year, another tech firm, job hunting website operator Indeed, also signed a big lease in Austin, taking more than 300,000 square feet of office space to help house about 3,000 employees.

Facebook opened a small, seven-person office in Austin 2010, becoming one of the first major U.S. tech firms to open an office in the market. The new lease with TIER REIT will establish its fourth major location in Austin, with a major presence in north Austin and downtown.

Facebook currently occupies a little more than 100,000 square feet at another building in the expanding Domain complex located in north Austin in Domain 8 at 11601 Alterra Pky. With its new commitment in Domain 12, Facebook will have more than 420,000 square feet in north Austin.

Meanwhile the firm continues to expand its downtown Austin office location as well. Last month, Facebook moved into additional office space the firm leased in downtown Austin, occupying 231,506 square feet in Third + Shoal, at 208 Nueses St. In November, it is planning to expand into an additional 58,412 square feet in another downtown Austin building at 300 W. Sixth St., where it will occupy a total of 205,188 square feet.

In addition to Facebook, Austin’s tech roster includes such other major players as Google and Indeed, both of which have leased hundreds of thousands of square feet of office space to accommodate their growth.

Also the U.S. Army in July selected Austin for the home of its new Futures Command center, after a months-long search of 150 cities across the country.

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