By Keith Loria, Contributing Editor
A joint venture between Cielo Property Group and TIER REIT, Inc., will develop a 28-story Class A office building at 208 Nueces St., in the southwest area of downtown Austin, with construction set to begin in 2016.
“In terms of Austin and its office market, it has been one where we have seen a substantial decrease in its vacancy rate from the height of the recession,” Robert Kramp, CBRE’s director of research & analysis for its Texas region, told Commercial Property Executive. “It has been sliced almost in half and our second quarter figures weigh in at area-wide vacancy of about 12 percent. The CBD checks in at 10.2 percent, which is a remarkably low figure.”
According to Kramp, there is an extremely high demand for office space in the area, especially Class A space.
“Our recent report shows that Austin has experienced and witnessed its 18th consecutive quarter of positive net absorption, and it was close to half a million square feet,” he added. “The majority of that was Class A and there’s a dearth of availability in the Class A market, and some tenants are being squeezed out into Class B and Class C space.”
The new tower will reside where the current 43,000-square-foot Austin Music Hall music venue is situated. Originally built in 2007, the Music Hall will be demolished at the end of the year.
The planned building at 208 Nueces St., is being designed by Gensler, and the sleek glass tower is expected to feature 10 floors of traditional office space as well as three floors with 28’ high ceilings that will allow inter floor connectivity and loft-style work areas and flexible creative-office space unique to downtown Austin high-rises.
“We’ve seen first-hand the extremely high demand for office space in downtown Austin and even with all the new construction there isn’t much space available,” Bobby Dillard,” Cielo’s founding principal, said in a company statement. “This building will offer a premier location in what is quickly becoming the heart of downtown with amazing views and plenty of amenities onsite and within easy walking distance, including the Whole Foods world headquarters, the new Trader Joe’s at Seaholm and dozens of restaurants and bars.”
The 349,000-square-foot office tower will also feature a strong connection to the outdoors with the inclusion of multiple outdoor decks overlooking Shoal Creek. The tower will offer an above-market ratio of vehicle parking spaces, and Cielo plans to encourage tenants to bike to work with a 300 stall-secured bike parking facility with over sized locker rooms inside the building.
The project also calls for ground floor retail, with plans for a restaurant space overlooking Shoal Creek and retail and/or restaurant space at the corner of Third Street and Nueces.
The building is scheduled to be completed by the end of 2017.