While Oracle puts finishing touches on new Austin office, tech giant buys more adjacent land
Oracle Corp. appears to planning for expansion of its Southeast Austin campus even before the $300 million-plus development is completed.
Public records show that Oracle America Inc. purchased around six acres at 2225 Elmont Drive, directly south of its 560,000-square-foot campus now under construction. The six-acre plot of land was purchased from an entity formed by Cypress Real Estate Advisors.
The deal closed Oct. 10, according to documents filed at the Travis County Clerk’s office. As is customary in Texas, no purchase price was disclosed but the Travis Central Appraisal District most recently valued the land at about $3.9 million.
It appears that Oracle’s general contractor, Ryan Cos., has been utilizing the newly acquired land as a staging area for construction of the nearby glass and steel campus. The land is now fenced off from the surrounding neighborhood.
Cypress rezoned the property in April. Documents at the city of Austin show that the land had been designated Neighborhood Mixed Use, and Cypress sought a designation as Riverside Corridor Mixed Use, which would allow for density bonuses and additional height — up to 120 feet, which could equate to about 10 stories.
Because Cypress has a history of building multifamily, the deal looked like a typical land-use plan for the firm. Staff notes indicate that Cypress was in the early conceptual phases of the project but that it was proposing to build 600 apartment units with some commercial spaces and live-work-play elements.
It’s unknown whether this new entitlement was sought on Oracle’s behalf as the pending buyer or whether Cypress was approached to sell the land after the zoning changes were approved by City Council.
Oracle (NYSE: ORCL) has not responded to a request for comment. No site plans or building plans have been submitted to the city yet for the new parcel, according to city spokeswoman Sylvia Arzola.
It’s also unknown when Oracle’s Austin campus at 2300 Cloud Way will be open but landscaping on the property and construction of an driveway entrance on the south side are well underway. The company had 145 job postings on its website for Austin as of Monday. About a year ago, ABJ uncovered details on the multimillion-dollar tenant improvements Oracle was making on the main campus site.
There was no mention of the new campus timeline during Oracle’s most recent earnings call Sept. 14, but the discussion with C-suite executives focused in large part on the company’s growing cloud technology business. That’s precisely what will be supported by personnel hired for the new Austin campus.
Oracle’s relationship with Cypress goes back to the initial plans for the campus. The concept for an office campus in an area that has been primarily residential with Class B and C retail for years was introduced in large part by Ryan Cos., the Minneapolis-based developer and contractor.
Ryan had been marketing the site as a corporate headquarters though Cypress retained ownership of the land. I wrote about Ryan’s vision for the site in October 2014.
In time, Oracle recognized that this was an opportunity worth pursuing, probably because of its location on the south side of Lady Bird Lake with close proximity to downtown and Austin-Bergstrom International Airport.
Still it seemed like a maverick concept because the Riverside corridor had long been shunned by established developers. For many years it had been home to blue-collar households and University of Texas students. UT had built several student housing projects there over to years that largely catered to graduate students who needed inexpensive off-campus accommodations.
But as Austin’s population has exploded, more developers and investors were willing to venture out of their comfort zones, given all the advantages of the Riverside corridor.
The potential for creating a signature campus there appealed to Oracle at some point, which has a large presence in Northwest Austin for other business lines. Oracle announced its new campus plans just before Christmas 2015.
The company purchased 27 acres of undeveloped land from Cypress and retained Ryan as the general contractor for the main campus project. Oracle also purchased an adjacent apartment complex that Cypress had recently built — Azul Lakeshore. It was speculated that eventually Oracle would transform that into workforce housing for employees, which ostensibly is still the game plan.
The new acquisition might present a similar opportunity with additional commercial uses.
According to the April 20 staff report on the recommended and subsequently approved rezoning, the developer of the parcel at 2225 Elmont Drive would be required to provide a specific amount of designated affordable housing, open space and public benefit amenities in exchange for greater density and height. The zoning change was unanimously approved by the Council and Mayor Steve Adler.
Another Austin-based apartment developer — Oden Hughes — could benefit greatly by the opening of the Oracle campus. That company is finishing up construction of Lenox Boardwalk, a 339-unit apartment project at 2515 Elmont Drive, adjacent to the tech company’s new offices.
Source: Austin Business Journal
Jan Buchholz, Senior Staff Writer