Spec development on the rise in Northwest Austin as companies expand, open offices

Domain Tower will be located off Braker Lane near Burnet Road.

Domain Tower will be located off Braker Lane near Burnet Road.

Image description
Growing Up
Image description
Rental Rates Rising
Construction had been underway for five months on an 11-story office tower near The Domain when Indeed.com signed a lease for the entire building.

Known as speculative development, development companies starting construction without confirmed tenants has become more commonplace as Austin continues to draw interest from companies looking to move or expand throughout the city, said Richard Paddock, office project partner with HPI Real Estate Services & Investments, which worked with real estate private equity firm Stonelake Capital Partners on the Domain Tower project that finished in 2018.

“With the velocity of deals and companies coming to Austin, a good amount of the recent development has been on a spec basis,” he said.

But for spec development to be successful in Austin, Paddock said it comes down to the location, and downtown, East Austin and The Domain are prime places for spec buildings.

“The city is tight on space everywhere,” he said. “This has been an ideal situation to go spec.”

Stonelake, the master developer for the southern portion of the Domain, is also working with HPI on a smaller five-story building also under construction. Domain Place will open in October and is now leasing, Paddock said.

Why Northwest Austin is seeing growth in its office market comes down to two things, said Tim Donohue, vice president at real estate services firm CBRE. The first factor is the presence of and growing amenity base at The Domain. Second, companies are finding increased costs, such as real estate taxes and parking expenses, are becoming greater, he said.

“The average cost of parking in downtown is certainly forcing companies to make decisions,” he said. “The lack of transit in areas [of the city] makes Austin vehicular-heavy.”

CBRE reports 5.6 million square feet of office space is under construction in the city, and that will drive up rent prices, Donohue said.

“I see demand continuing for the foreseeable future,” he said.
SHARE THIS STORY


MOST RECENT

Vegetable chow mein ($9.99)
Limbu makes a traditional Chinese dish made from egg noodles with a Nepali street-style sauce. (Iain Oldman/Community Impact Newspaper)
Northwest Austin eatery features a taste of the Himalayas

Northwest Austin eatery features a taste of the Himalayas

The Broadmoor Campus is proposed to have a new MetroRail station. (Rendering courtesy Brandywine Realty Trust)
City to work with Capital Metro on financing new Broadmoor and McKalla Place rail stations as development boom looms

Austin City Council expects the new Austin FC stadium and massive mixed-use development planned for McKalla Place and the Broadmoor Campus to result in heightened demand for public transit.

The Atlas 14 rainfall study found Austin to be at a much higher flood risk than previously understood.
Acknowledging expanded risk, Austin moves to prohibit additional density in city’s flood-prone areas

A recent federal flood risk study found Austin's flood risk to be significantly higher than previously understood.

The city of Austin authorized the purchase of a Rodeway Inn at 2711 S. I-35 on Nov. 14. The city plans to convert the property into a homeless shelter. (Olivia Aldridge/Community Impact Newspaper)
City Council green lights $8 million Rodeway Inn plan for homeless shelter transition, vows to address crime in the area

South Austin neighbors raised concerns that criminal activity in the area will put homeless individuals who enter the shelter at risk.

Lady Bird Lake at Congress Avenue in Austin. Since late July, parts of the lake have been off limits due to high concentrations of toxic "blue-green" algae. (Courtesy Miguel Gutierrez Jr./The Texas Tribune)
Toxic algae blooms are becoming more common, scientists say

Months have passed, but the capital city still has signs up warning of ongoing dangerous conditions in Lady Bird Lake.

Community members examine updated zoning maps at land development code town hall in October.
Land development code rewrite heads to City Council for final approval, marking home stretch of nearly 7-year process

Austin's long-awaited land development code rewrite is heading to City Council for final approval.

Crews work on updating a section of I-35 in Central Texas (Courtesy TxDOT)
Central Texas transportation agencies investing millions in I-35 for new lanes, intersection improvements aimed at aiding mobility

About 20 miles of I-35 through Central Texas will see an infusion of $400 million in state and federal funding to add one to two additional lanes in an effort to improve mobility.

(Iain Oldman/Community Impact Newspaper)
Round Rock, Austin locations of Catch Air to become PlayMazing Indoor Play & Party

Both Catch Air Round Rock, located at 1401 South IH-35, Ste. 130, and Catch Air Austin, located at 13450 Hwy. 183 Ste. 107, will be renamed PlayMazing Austin and PlayMazing Round Rock on Nov. 15.

St. David's HealthCare is the founding partner with Two Oak Ventures, the ownership group of Austin FC. (Courtesy Austin FC, STG Design)
Austin FC to locate $45M training facility at mixed-use Parmer Innovation Center in Northeast Austin

Austin FC announces $45 million training facility to be located in Northeast Austin at new development

Delia Garza speaks to her constituents at a town hall meeting in 2017.
Austin Mayor Pro Tem Delia Garza says she will not seek re-election as Travis County attorney rumors heat up

Austin's mayor pro tem will not seek reelection to her Southeast Austin district seat in 2020.

Deece Eckstein at the Nov. 12 Travis County Commissioners Court meeting
Travis County intergovernmental relations officer announces retirement, triggers "aggressive" hiring schedule

Deece Eckstein, Travis County's inaugural intergovernmental relations officer, will retire at the end of the year.

Back to top