Spire closed on the sale of the 21-story Chase building Monday, said Jon Ruff, senior vice president for Spire.
Ruff said Spire likes the stability of the Austin market, particularly downtown, where it will look for other buying opportunities.
"We like Austin. We want to be in Austin, and we plan on being there a while," he said.
The Chase Tower, built in 1974, sits on a full city block at 221 W. Sixth St., has nearly 390,000 rentable square feet and is 96 percent leased. Spire intends to hold Chase for the long term, Ruff said.
The sellers were several limited partnerships that include Austin-based Endeavor Real Estate Group and Grubb & Ellis Realty Investors LLC (formerly Triple Net Properties LLC). Endeavor and Triple Net bought the building in 2006, paying $72 million.
Endeavor's headquarters are in the building, which is home to the private Headliners Club on the top floor.
Several experts said the acquisition is good news for Austin — an omen of an improving office market and solid growth prospects for its economy.
"It's a great sign, a big major office building selling downtown," said Jessica Ruderman, a senior analyst with Real Capital Analytics Inc., a New York-based consulting firm.
Ruderman said the bottom was reached last month for office sales nationally and locally, and "it's only going to increase from here."
Ruff declined to disclose the purchase price. However, the initial purchase agreement signed in November listed the price as nearly $73.7 million, or about $189 a square foot. A source knowledgeable with the sales confirmed that the sale closed at that price.
By comparison, Equity Office Properties Trust paid $188 million — $354 a square foot — for the Frost Bank Tower downtown in 2006. Thomas Properties Group Inc., Frost Bank's current owner, paid $1.2 billion for Frost and nine other Austin office buildings in 2007 but did not disclose the price of each building.
Ruff said Spire also plans to make purchases in Dallas and Houston, the other markets it which it owns office buildings.
"We think it's a good time to be active. We're in a position to move quickly now, and are trying to do so," Ruff said.
Spire also owns 611 E. Sixth St. in Austin, which includes the Texas Lottery Commission headquarters.
Holliday Fenoglio Fowler in Dallas represented the seller in the Chase sale and represented Spire in arranging financing.
"Spire's acquisition of Chase Tower is a significant transaction for Austin, and the Southwest in general, as it evidences that both debt and equity capital is flowing once again into our markets," said Andrew Levy, senior managing director of Holliday Fenoglio Fowler.
Downtown Austin has maintained the lowest office vacancy rate among the Austin area's three largest office submarkets and the highest asking rents citywide throughout the recession, according to Oxford Commercial, which tracks the market.
Downtown Austin's first-class buildings were 83.2 percent occupied at the end of 2009, with rental rates averaging $36.72 a square foot per year.
Ford Alexander, a partner with Oxford Commercial, said the Chase purchase is "the first significant office transaction in our market in over a year."
"Asking prices and bidding prices have been out of equilibrium for some time, so this should portend more sales in the coming year," Alexander said.
At Chase, Ruff said, Spire plans to make improvements, including to its building systems, common corridors and other areas, on top of renovations the previous owners made to the lobby and other areas.
"We plan to be active in the market and the community, and I hope that presence only grows over time," Ruff said.
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