Real estate investment trust Alexandria Real Estate Equities has emerged as the buyer of a prime piece of real estate in downtown Austin, Texas, that is expected to get redeveloped.

The Pasadena, California-based company bought the longtime headquarters of the Teacher Retirement System of Texas at 1000 Red River St. for $108 million, according to property records filed with the county.

The Teacher Retirement System of Texas, one of the nation's largest public pension funds, announced the campus sold and the purchase price but did not disclose the buyer, only saying it was a subsidiary of a publicly traded REIT. The pension fund plans to lease back the two 1970s-era buildings comprising 198,972 square feet for two years while it waits for its new headquarters to be built about 4 miles north of the central business district.

Alexandria is one of the nation's largest owners of biotech and life sciences properties, and the purchase represents one of its first in Texas. Alexandria's plans for the property have not been revealed, and the company did not immediately respond to inquiries for comment from CoStar News. However, CBRE Group, which listed the property for the Teacher Retirement System of Texas, marketed the 3.8-acre campus as a "premier redevelopment and life science conversion opportunity in downtown Austin."

The Red River campus, which is within walking distance of the Capitol, is also near Dell Medical School and the University of Texas at Austin. The site located just west of Interstate 35 is in an area that is becoming known as Austin’s Innovation District because of its transformation into "a vibrant hub for researchers and companies," said Israel Linares, senior market analyst for Central Texas for CoStar Group.

The pension fund's Red River office is "located near the epicenter of the Innovation District and could become a site for future life science users," Linares said.

In addition, its location in the central business district means the campus is close to major tech companies leasing office space in downtown Austin's skyscrapers such as Facebook, Google, TikTok and Snap.

The campus was put on the market in January and garnered a lot of interest with over 40 property tours and 13 serious offers, followed by a second round of offers and buyer interviews in May, according to the pension fund's board meeting minutes.

At a July board meeting, the Teacher Retirement System of Texas selected the finalist and backup buyers, according to the minutes. A spokesman for the retirement system declined to identify the finalist and backup buyers.

The deed with Alexandria was signed Sept. 27 with an effective date of Oct. 4, according to property records.

Alexandria oversees a nationwide biotech property portfolio of more than 41 million square feet that is mostly concentrated on the East and West coasts. As of June 30, Alexandria reported it owned 14 properties in Texas totaling 1.87 million square feet in Austin and Houston, according to its latest quarterly report filed with the Securities and Exchange Commission.

Alexandria said in the filing it has "value-creation projects" totaling 2.23 million square feet in Texas in its construction pipeline that will be redeveloped or constructed in the near term or future. The locations of those projects were not disclosed.

The Teacher Retirement System of Texas announced plans last year to purchase a two-building office campus under construction in the Mueller District for its new headquarters in a move that would save about $15 million over the next two decades on real estate costs by consolidating offices.

The purchase was expected to cost between $250 million and $300 million, according to board documents.

The new 450,000-square-foot headquarters is expected to allow the retirement system to accommodate future growth. The pension fund manages assets with a market value of $184.4 billion as of June 30 and had 1.9 million members and about 1,000 employees. When the retirement system first opened its campus on Red River in the 1970s, the pension fund had around 200 employees and 300,000 members.

The Teacher Retirement System of Texas is focused on reaching members in underserved areas by opening regional offices with the first one slated to open in El Paso next month, according to a statement.

The retirement system plans to start moving select divisions to the Alpha building at its new Mueller District headquarters next summer. The remaining staff will move into the neighboring Bravo building in late 2024. The buildings are being developed by Shorenstein Properties along Aldrich Street close to restaurants and shopping and include outdoor spaces on most floors and ground-level courtyards.

The Mueller District is part of a large-scale, mixed-use and master-planned development on 700 acres at Austin’s former airport that includes single-family homes and apartments, offices, retail, dining and entertainment options.

CBRE’s Russell Ingrum, Peter Jansem, Troy Holme, Jennifer Joseph, Patrick Benoist and Jared Chua represented the Teacher Retirement System of Texas in the disposition of its Red River campus.