On October 29th, 2020, I had the opportunity to attend the Austin Business Journal (ABJ)’s second annual East Austin Growth Summit to discuss the many changes coming to this rapidly evolving part of our city. In this article, I have summarized some of the top takeaways from the event for those who were unable to attend, including:
- Transportation improvements
- The Tesla transformation
- Upcoming commercial developments
Transportation is an important piece of the puzzle when it comes to the growth of East Austin, and there are several ongoing and upcoming projects in the works intended to address those needs.
Retail follows rooftops, rooftops follow roads.”
– Colin Pope, Editor, Austin Business Journal, East Austin Growth Summit
The 183 South project is currently under construction and expected to be fully open to traffic in January 2021. Once completed, the project will tie into the other completed and upcoming upgrades to the 183 corridor in Austin and provide nonstop service from Austin-Bergstrom International Airport to Liberty Hill.
Not only will these upgrades allow for better north-to-south traffic flow and easier access to Austin’s airport, but will serve as an important alternative to IH-35 for employees working in the area, especially once IH-35 itself begins to undergo construction in Austin.
On top of road construction, foot and bike traffic has also been taken into account. There will be 31 miles of hike-and-bike trails throughout the corridor upon completion, stretching from Callahan’s General Store in Southeast Austin to Georgetown.
The Tesla Transformation
Tesla’s recent announcement that it will be building a new factory in East Austin is not only one of the biggest real estate announcements in Austin this year, but might be one of the most important real estate deals in Texas in 2020. At 2,100 acres, 4 to 5 million square feet of industrial space and an estimated $1 billion construction price, this factory is no small feat.
According to Laura Huffman, president and CEO of the Austin Chamber of Commerce, Tesla will make an impact on Austin across three fronts: jobs, school funding and innovation.
Tesla estimates its Austin factory will generate 5,000 new jobs with an average salary of $47,000. On top of those jobs, estimates indicate that every one Tesla job could generate as many as four additional jobs in the area. With rising unemployment, these jobs will be of great benefit to the Austin economy.
Tesla’s factory is also going to provide a fantastic tax revenue source for the Del Valle school district that serves much of East and Southeast Austin. The school district approved a $46.4 million property tax break over 10 years but still believes the net result of Tesla choosing this location will be a significant positive impact.
The opportunities for continued innovation within Austin’s business community are also substantial due to Tesla’s new factory. Not only is Tesla a top-tier automotive manufacturer, but it is a leader in the technology space as well, which Austin has built a reputation for. Some estimates indicate as many as 50 or more companies could potentially follow Tesla to Austin to act as suppliers and support services, bringing with them talent, tax revenue, and additional innovation.
Tesla estimates construction on its new factory could be completed as early as May 2021, so it won’t be long before East Austin starts to see some of these changes taking place.
Upcoming Commercial Developments
Of course, it’s hard to talk about Austin’s East submarket without also talking about all the office, residential and retail development in the pipeline. While this area has historically been limited to industrial space, office space is becoming an increasingly important component. Between projects currently under construction and proposed projects waiting in the queue, East Austin is going to look much different before long.
WANT TO LEARN MORE ABOUT AUSTIN’S FUTURE?
Download our latest Austin Office Market Report to read exclusive insights from AQUILA brokers regarding Austin’s four primary submarkets.
You can view a full list of projects in our most recent office quarterly report, but below are some of the most notable commercial developments mentioned during the discussion:
MetCenter office space – Developers at MetCenter in southeast Austin have proposed up to 1.5 million square feet of potential development. This project will be well suited for a post-COVID-19 world, offering ample outdoor areas, separate tenant entrances, and minimal dependency on elevators.
Velocity – East of the airport, this project is expected to bring up to 7 million square feet of commercial space. Current plans include 2,700 apartments, 3 million square feet of office space, 585,000 square feet of industrial/flex space, and 310,000 square feet of retail space. The project will be built around a 7-acre park.
4700 E Riverside – Previously known as Project Catalyst and nicknamed the “Domain on Riverside,” this project is expected to bring a downtown-style atmosphere to the Riverside corridor. Developers estimate they are still 2 to 3 years away from beginning the first phase.
BAE Systems Campus – BAE Systems recently sold its East Austin campus to Karlin Real Estate. No word yet on what plans are for the campus moving forward, but most expect that it will soon be marketed as a great redevelopment opportunity.
East Austin was one of the fastest-growing areas of our city prior to COVID-19, and all indications point to it continuing that growth over the long term. Between improvements in transportation, Tesla’s impact, and the upcoming developments that will soon dot the skyline, East Austin and the surrounding southeast area is going to be an interesting place to watch for years to come.