Varied Building Plans Show Austin's Market Confidence

AUSTIN-Charlie Betts looks around downtown Austin and likes what he sees: The steel skeleton of the 545,522-sf Congress at Fourth building rising on Congress Avenue; an 800-room Hilton Hotel, now 15 months from completion; a 250-room Hampton Inn getting ready to open and three multifamily residential projects just getting off the ground.

“There’s a lot of activity for the recession we’re in,” says Betts, executive director of the Downtown Austin Alliance. “It’s a huge vote of confidence in the future of downtown and Austin that these projects are coming on line in the midst of a fairly significant recession.”

Another vote was cast this week when Ballet Austin bought a 28,000-sf building at 501 W. Third St. for its headquarters and dance facilities. Also this week CLB Partners started work on its 82-unit Austin City Lofts on the northwest corner of Fifth Street and West Avenue. Ten units have been sold and four have been reserved, says Bobby Naill, a CLB vice president managing the project.

Even through the downturn that has pushed up vacancy rates for most commercial properties–retail has been the exception so far–the cranes and construction crews have been busy downtown. Betts cites burgeoning residential projects as evidence of the downtown’s continuing vitality. In addition to Austin City Lofts, Phoenix Properties’ has a 139-unit project going up on the southeast corner of Fifth and West and AMLI Residential is pushing ahead on a 220-unit apartment project at Second and Guadalupe streets in the middle of the new city hall plaza project. “That represents a significant increase in the downtown residential population,” he says. The planned Whole Foods Markets Inc.’s 80,000-sf flagship grocery stores and seven-story office building will add to the downtown’s strength, Betts says.

The developers are banking on an economic turnaround to put people in their offices and living units. “There are some people betting big-time dollar investments that this recession isn’t going to last much over another year,” Betts says. He hopes their bets pay off.