Materials company 3M told its employees on Wednesday that it has reached a deal to sell its Austin campus and that employees will be moved to a new building off Parmer Lane in Northeast Austin.
Austin-based World Class Capital, a private investment firm that focuses on real estate, has agreed to buy the 156-acre 3M land for an undisclosed price.
Lori Anderson, a spokeswoman for 3M, said the transaction is expected to close in the fourth quarter of 2017.
Employees will be moved to a new building in April of 2019, she said. It is located in the Tech Ridge area of Northeast Austin that includes other major employers, such as Dell Technologies, Blue Apron and GM.
“We are investing in a new building,” Anderson said. “It will be the state-of-the art and construction will begin later this year.”
World Class Capital owns numerous properties in Austin. In recent years, the company has purchased sites that housed Spaghetti Warehouse, the downtown IHOP, Katz’s Deli and La Zona Rosa in downtown Austin, as well as the former 118-acre Cypress Semiconductor land in Round Rock.
The company also owns land at Trinity Street and East Cesar Chavez Street in downtown Austin. In 2013 the company’s founder and president, Nate Paul, announced plans for a $100 million, 39-story apartment tower that was due to open in 2015.
That project never materialized.
Paul did not immediately respond to a request for comment.
Based in Minnesota, 3M is best known as the maker of Post-it notes and Scotch tape.
The company first built this campus back in 1988, according to the 3M website.
The campus — which has an assessed value of more than $80 million, according to the Travis Central Appraisal District — is in an area that has seen an influx of residential and retail development in recent years.
With Austin’s office market facing a space crunch, the purchase could be well-timed, said Sam Houston, office division partner with HPI Real Estate Services & Investments, an Austin-based firm that also looked at the 3M site.
“The Austin office market continues to grow, and with construction financing very difficult to get for office development, new supply is going to be very limited. The 3M space becoming available in 2018 could be very good timing to land a large tenant,” Houston said.
He added: “I would venture to guess that some of the excess land will be converted to other uses beside office. Multifamily and senior living facilities would do quite well in that location as well.”
The current 3M campus includes 1 million square feet of office space. The 3M land, at RM 620 and RM 2222, is home to employees who work in 3M's "electronics and energy" group, as well as its research and development facility.
Anderson said the people who work at 3M’s main Austin site include a mix of positions that support our business operations, ranging from research and development to marketing to supply chain. The company also has a manufacturing facility here.
The company has been whittling down its Austin workforce over the past several decades. In 2015 the American-Statesman reported 3M had about 1,000 workers locally.
This is a developing story and will be updated as we learn more information.