"It's real interest. I don't think it's make believe," he assesses of a recent lunch with a Boston-based hotel developer. The state capital has fewer hotel rooms, 18,732, than any other Texas metropolis. Hampton is building a 15-story, 200-room hotel in the Second Street area and another hotelier has a site under contract along the same street, both sparked by a convention center expansion.

Interested developers aren't just checking out hotel prospects. Intel, which has halted its CBD construction, has floated 50 information packets about its building. A Trammell Crow Co. broker is fielding those calls. Vignette's stalled project also is attracting its share of would-be buyers, ranging from hoteliers to office developers, says Betts.

If nobody would be looking at Austin's available CBD space, then, says Betts, "I'd say we have a problem. The downdraft of the new economy has had an impact, but it's certainly not a devastating one." He admits disappointment in the stalled CBD projects, but quickly says he's confident they will be finished, if not by the current owner then by someone else.

Tim Hendricks, senior vice president of Cousins Stone Austin Development Office, is optimistic the tide will turn by the fourth quarter. Then, Hendricks hopes to be making an announcement about the firm's Congress at Fourth Street project and its thus far hushed pre-leasing activity.

Hendricks praises those developers who have put suburban projects on the backburner for the good of the Austin market. It's those submarkets, particularly the northwest, that are the root of the backlash from publicity surrounding the city's state of affairs, he says. Hill Partners and McShane Corp. are simply being "good stewards," he emphasizes.

Jeff Pace, CarrAmerica's managing director for Austin, is as bullish as Betts and Hendricks on the CBD. His vested interest is the 300 W. Sixth St. office tower. It is 50% pre-leased and deals in the pipeline that could take it to 70% or 75%, he tells GlobeSt.com.

"It's still going to continue to be slow for the remainder of the year, but there are still many companies who desire to be downtown," says Pace. "We have confidence in the downtown. In the long term, we have a high level of confidence."

Betts says the overall office market might be sluggish, but it's no longer choking new business. Last year occupancy had hit 97% and hovered close to 98%. Today, it's more like 90%, maybe a tad lower. "We were full. We couldn't attract anybody downtown," Betts says. "I'm not too terribly unhappy with the state of the market."

Instant Insights /

Would-Be Buyers Eyeing Up Austin CBD Prospects

Related Stories

Recommended For You