Lincoln Property Co. and Kairoi Residential recently opened Waterline, a mixed-use development that, at a planned height of 1,022 feet, will hold the distinction of being the tallest tower in the state of Texas.
The 2.7 million square foot project will include, among other offerings, a whopping 700,000 square feet of prime office space and will cost about $520 million to complete, according to the Texas Department of Licensing & Regulation.
Standing 74 stories high, Waterline will mark the downtown Austin skyline at 98 Red River St. The awe-inspiring skyscraper will soar over Waller Creek and Lady Bird Lake on a site spanning more than 3 acres and, along with the adding new pedestrian bridges, will act as a new thoroughfare between the central business district and the bustling historic Rainey Street district.
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Architecture offices Fox by Kohn Pedersen and HKS are behind the design of Waterline, which will have 24,000 square feet of dining and retail offerings on the ground floor just below the 13 floors that will house the 251-key 1 Hotel Austin. The upper 33 floors of the tower will house an upscale residential segment of 352 units which will have its own dedicated amenities.
Waterline’s office segment will include Class A offerings spanning 27 floors in the middle of the LEED Gold-certified tower. Office amenities will include a 14th-floor furnished terrace with 24,000 square feet of landscaped outdoor space, as well as a bar and lounge, prep kitchen and indoor meeting spaces. On the second floor, office users will also be able to take advantage of a state-of-the-art 7,000 square foot fitness center.
“The Austin office market continues to see strong demand from businesses and technology users for best-in-class developments,” said Seth Johnston, senior vice president, Lincoln Property Co. commercial real estate director. “It enables businesses to create a more connected office experience through improved amenities, a commitment to sustainability, and access to the best of Austin. Waterline will offer just that, only to be bettered by the Creek Side and 1 Hotel retail offerings.
Not too much for the Austin office market
Dallas-based LPC’s Austin portfolio is in growth mode, adding more and more square footage to the Austin office market. The real estate company has two other joint venture projects under construction, The Republic office tower and the Sixth and Guadalupe mixed-use buildings, slated for delivery within the next two years.
LPC isn’t alone in trying to build additional offices in Austin. With demand and prices on the rise, construction activity continues to increase, resulting in 8.5 million square feet under development in the second quarter of 2022, according to a report by Avison Young. LPC, however, is not discouraged by the competition.
“Although delivery of this project is a few years away, we are confident in the continued growth and demand for mixed-use development projects in Austin,” Johnston said. “When Waterline delivers in 2026, the office, luxury residences for rent and 1 Hotel partnership will provide a premium experience for users of this project that will allow them to work, live and stay in one prime location. which represents the best that Austin has to offer.
There is statistical evidence that demand in Austin’s office sector could very well remain strong enough to absorb the large amount of space that Waterline will provide four years from now. As noted in the Avison Young report, Austin leads all US markets in office employment growth, having added nearly 75,000 jobs, marking a 23% increase between February 2020 and April 2022. more, in support of Johnston’s earlier comment, the report found that tech users continue to value the Austin market, with high tech job postings up 35% from March 2020 to June 2022 .
The investing and lending communities apparently see market value as well. Canada Public Sector Pension Investment Board is Waterline’s main financial partner. And Blackstone Mortgage Trust Inc. provided the construction loan for the project, noting in a prepared statement that it continues to see strong demand for new prime residential, office and hospitality assets in high-growth markets like Austin.
LPR and Kairoi have selected CMA serve as the general contractor for Waterline. Office tenant improvements are on track to begin in May 2025, with the tower expected to be completed in August 2025.