Tech firm Dropbox bound for new Congress Avenue office building

May 19, 2014
Austin American Statesman

The six-story office building under construction at East Fifth Street and Congress Avenue in downtown Austin has landed its biggest tenant: Dropbox, a software firm that’s in line for city and state incentives

San Francisco-based Dropbox will lease about 60,000 square feet — the top three floors of the new building called 501 Congress, Lance Sallis, a partner with Stream Realty in Austin, told the American-Statesman. Dropbox — a cloud-storage and file-sharing service with more than 275 million users — plans to move into the building when it opens in January

Stream, a national real estate services, investment and development firm, is developing and leasing 501 Congress, which is being built at a cost of more than $30 million. Stream’s partners in the project are Wanxiang America Real Estate Group and Diversified Real Estate Capital

Formerly an annex of the adjoining 26-story Bank of America tower, which Stream also owns, 501 Congress is getting a top-to-bottom makeover that will transform it into just over 122,500 square feet of office space

Dropbox officials declined to say how many employees will work in the building initially. The company currently offices in the Bank of America building while the new space is being built

In February, the Austin City Council voted 5-2 for an incentive deal for Dropbox totaling $244,500 over 10 years. Under the agreement, Dropbox must create 170 jobs during that time with an average annual salary of $59,000 and make a $5.5 million capital investment

Sujay Jaswa, chief financial officer for Dropbox, has said the company was drawn to Austin for its “strong talent base” and “vibrant tech culture.”

Sallis said Stream is tailoring the new space to appeal to tech firms and other companies looking for “boutique” space that stands apart from more traditional office space. The building will have a lounge-like lobby; walnut panels, terrazzo tile and murals; an atrium; a rooftop terrace; and what Sallis said will be the city’s first “doggie potty” on the roof

“Our original intent was to develop the space for tech and creative companies and, so far, the appeal of that boutique-type office space has been stronger than we anticipated,” he said

Two Austin-based firms, Michael Hsu Office of Architecture and Sixthriver Architects, are designing 501 Congress. The project will include a new eight-story parking garage with 300 spaces located behind the office building, where an older valet parking garage was recently razed

The office building will have ground-floor retail and restaurant space. Allen Edmonds, an upscale menswear retailer, has signed a lease for 2,518 square feet of space, Sallis said. Additionally, Stream is negotiating a lease for “a very cool diner concept” that will face East Fifth Street and have cafe-style seating and outdoor dining, he said

Sallis said he has no shortage of prospects for the remaining 40,000 square feet of office space in 501 Congress

Like 501 Congress, other new office buildings under construction downtown are also seeing strong interest amid the region’s healthy office market. Downtown office buildings are more than 88 percent occupied, according to commercial real estate brokerage CBRE

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