Downtown Austin Set for Transformative Developments

As it continues its climb skyward as the tallest building in Texas, the 74-story Waterline tower will eventually overlook an Austin riverside district undergoing considerable transformation.

Important new projects have been proposed and approved, which, over time, promise to expand housing and offer new entertainment and recreational activities across the south-central waterfront near the Colorado River.    

If rezoning is approved by Austin City Council, an auto care center and small office-retail building on South Congress Avenue across the river from the Waterline could be replaced by a 480-foot tower. The overall development would provide nearly 500 residential apartment units along with nearly 40,000 square feet of office space and pedestrian walkways.

River Park Phase One development is moving ahead and will result in four mixed-use 
buildings and parkland over 15 acres. Image: Presidium Group LLC 

In fact, the entire south Austin area is under development review, a process that began in 2016. It includes the creation of a civic blueprint to coordinate various public upgrades alongside increased density and height proposals for new commercial and residential developments. Several properties have been identified as suitable.

However, like the South Congress Avenue tower, physical progress awaits approval. One proposal awaiting the green light is a multi-tower project called 305 South Congress.

Although 305 South Congress received city council approval in December 2022, commencement of work has been delayed by a lawsuit alleging procedural violations by council, one of several actions launched against area development by the environmental non-profit group Save Our Springs Alliance.

If the project goes ahead, it would add close to 1,500 residential units, 1.5 million square feet of office space, a 275-room hotel, and 150,000 square feet of retail and restaurant space, spread across six buildings. The developer promises enhanced road and trail systems and expanded access to public parkland as part of its eight-acre layout.

A few doors south, another development envisions 800 residential units, a 225-room hotel, 200,000- square feet of office space, and 145,000 square feet of restaurant and retail space. It too faces approval delays that could stretch into 2025.

Happily, there is progress to report a few kilometers to the east near Roy G. Guerrero Colorado River Metro Park.

Dallas-based co-developers Presidium Group LLC and Partners Group have recently announced plans for a massive mixed-use project called River Park to be created over the next 10 to 20 years. The development will include a 65,000-square-foot venue for live shows and events.

"This new venue embodies our transformational approach to real estate investing,” Matt Bosquez, a Partners Group executive, said in a statement. “We're creating a unique space for Austin that will offer long-term value for the community.”

Alongside the entertainment venue, the co-developers ultimately hope to create multifamily homes, parkland, and a mix of office and retail space on the 109-acre site. Presidium already has a large presence in the Austin area as the lead behind Velocity, a 314-acre Master Plan development southeast of Austin.

The initial 15-acre phase of River Park, approved in May 2022, is a mixed-use development that will encompass four parcels and buildings totaling 1.2 million square feet. This will include offices, nearly 1,000 multi-family units, close to 30,000 square feet of retail space, and a 1.2-acre public park. Demolition of existing buildings on the site commenced in October 2023 with the removal of a 250-unit apartment block.

While such ambitious developments take many years of forward planning, the current commercial leasing environment in Austin is not as dynamic as it was earlier.

High-tech companies have been trimming office space across the country over the last year. Downtown Austin has not escaped the impact. As reported in August, over 16 percent of Austin’s commercial office space sat empty, reflecting a vacancy growth rate of over 12 percent from 2023.

 The uncertainty of Austin’s commercial office leasing market is even affecting a spectacular building like the $1 billion Waterline and its 700,000 square feet of available office space.

Mike Lynd, CEO of Waterline development co-partner Kairoi Residential, admits commercial office development in Austin is not as straightforward as it once had been.

For example, while both Meta and Google continue to maintain large staff and significant office space in the Austin area, they have also backed out of earlier expansion agreements. At one point, Meta had committed to leasing all of Waterline’s office space, Lynd told local media. The company changed its mind and backed out, but then came back to lease some of the building, but not all. Now he says Meta is undecided about either moving in or subleasing the space.

Meanwhile, others have established offices in the northwest Austin commercial district called The Domain that some call the city’s second downtown.

Yet Lynd looks to the future of downtown Austin and sees “an exciting time,” as evidenced by the numerous ambitious plans that continue to move ahead.

“We’re ready for the challenges," he said.

For more construction economy news and insights, subscribe to our economic reports.