With the end of a decade quickly approaching, we asked our AQUILA real estate experts what event, transaction or project had the biggest impact on the Austin commercial real estate market since 2010 and why.
Unsurprisingly, a few trends shined through – from the emergence of two new office markets to booming industry and more. Despite the overlapping opinions, each expert offered a unique view of Austin’s real estate market during the past decade.
Read on to find out what AQUILA’s real estate experts have deemed the most significant Austin real estate trends of the 2010s.
The Emergence of the Domain
Bart Matheney: Domain Northside and Rock Rose transformed the Domain, not only as a retail/entertainment center, but as a dominant office market. The area now serves as a blueprint for many live/work/play communities around the Central Texas area.
Max McDonald: In two words: The Domain.
Ben Tolson: Rock Rose brought the community and amenity base that lit the fire at the Domain. It’s hard to overestimate the significance of that stretch of restaurants and entertainment to the exceptional success story that is Domain office.
Chris Perry: While I believe the emergence of the East Austin Office submarket is a close second, the dynamic with the biggest impact has been the Domain. Because Austin is such a linear north-to-south city with minimal east/west thoroughfares, the emergence of the Domain as a second downtown has been epic.
Additionally, the incredible growth in the northern suburbs (Round Rock, Pflugerville, Cedar Park, Leander and Georgetown) has moved the demographic center mass of the metro area to closer to the Domain than even the CBD. The Class A tenant demand for very high-quality, high-rise buildings in the Domain has now been proven beyond a shadow of a doubt. The backlog of demand seems to have no end.
There are also abundant sites for more high-rise buildings directly to the east in the Brandywine Broadmoor project along with current projects such as Arena Tower and other to-be-built buildings in the Domain Gateway zoning district. In my view, this will lead to even more density and office square footage, creating a truly equal rival to downtown both in size and in market relevance.
The Transformation of the Eastside
Ben Tolson: C3’s lease at Eastside Village in 2014 served in many ways as the validation of the Eastside as a desirable office market. What’s happened since has been nothing short of a transformation of the Eastside. Obviously, a lot of other uses have filled in as well. But we now have an office submarket where we didn’t a decade ago.
Joe Simmons: The gentrification of East Austin was the most significant transformation event over the past 10 years. It reflects more than anything else Austin’s changing demographics and it’s growth from outside the city.
During this period, the IH-35 barrier was figuratively lifted between East and West. Investors, developers and tenants finally dismissed any historical preconceptions, turned to the future, and saw tremendous opportunity.
Kristi Svec Simmons: No one would have guessed how successful East Austin would have been as it relates to office space. The activity went from tenants “considering” the submarket as an option to tenants “wanting” to be there.
It is a strong indication of the growth of our city. And in 10 years from now, my assumption would be the areas around the former Highland Mall and the area near St. Elmo will be what East Austin is today.
Bethany Perez: While many people feel like the Domain has had the biggest impact on the Austin real estate market over the last 10 years, I believe the Eastside’s emerging submarket is equally as impressive. I moved to Austin in 2010 and have seen the Eastside transform dramatically in a relatively short period of time.
The first Class A office building was Eastside Village in 2015. Since then, it has been an extremely popular location for boutique office buildings, eclectic restaurants, local breweries and multi-family. With its proximity to downtown and growing popularity, the office rents have started to rival downtown rates, which are some of the highest in the country.
The eastside has developed into a true live/work/play environment and embodies all that we love about Austin. I’m excited to see what the next 10 years hold for Austin, especially the continued transformation of this submarket.
WANT TO LEARN MORE ABOUT EAST AUSTIN?
Download our East Austin emerging Projects Presentation to find out what’s changing and under construction in East Austin.
The Acceleration of the Tech Industry
Craig Andrus: I would say it was the acceleration of the tech industry, which in turn drove the construction of office buildings and residential housing, especially in the downtown area.
Kristi Svec Simmons: The announcement of Indeed committing to such a large presence in Austin set the stage for a multitude of other large companies increasing their foothold in the city. Austin’s landscape will be forever changed by the commitment of these large companies (Indeed, Amazon, Google, Facebook, etc).
Miles Whitten: The most significant trend in Austin CRE over the past decade has been on the receiving end of another trend happening elsewhere: rising housing prices, an increasing cost of living, and never-ending commutes are driving tech companies out of Silicon Valley. Austin, with its ‘silicon hills’ history and talented pool of skilled workers, has benefitted from this phenomenon disproportionately.
Other Significant Events
Matt Wilhite: I believe the extension of the Second Street district or the southwest quadrant of downtown from San Antonio to Seaholm, south of Fourth Street has been the most interesting and exciting development of the last decade. It started with the Seaholm and the world-renown Austin Public Library. 500 W 2nd and The Northshore (the record setting highest multifamily trade ever in Texas) followed and brought in a vibrant food and beverage scene.
The next phase consisting of Third + Shoal, The Independent, and The Austin Proper is wrapping up construction but promises to add significant density around the clock as well as additional retail and nightlife. Google’s Tower at Block 185 is currently under construction and will almost certainly replace Frost Tower and The Independent as the most notable building in Austin’s skyline.
Jay Lamy: Anytime a road is extended or the airport builds out another gate, that is the most significant thing for Austin’s real estate growth.
Or actually… I have had a chance to rethink this. The Super Bowl MVPs in February 2010 and February 2018 by Westlake High School’s Drew Brees and Nick Foles and the potential emergence of Sam Ehlinger were the greatest events from 2010 to 2019 to drive the Austin real estate economy.
Why? It means people are saying “what the heck is going on in Austin, TX?”… Football is the greatest sport in the history of the world, (editor’s note: Jay himself is a former Free Safety for the Rice Owls’ football team where he took home many awards, including the “Bloody Joe Davis”) and I may as well move to Austin where I give my kid the chance to win a Super Bowl MVP award.
A lot has changed across Austin and it’s surrounding areas in the past 10 years, and we can’t wait to see how it changes in the next 10 years.
To learn about what has been happening recently in the Austin office market, download our latest Austin Office Market Report.