North Austin’s “new downtown” showing few signs of cooling down
After ten years of steady expansion, The Domain is now not only referred to as Austin’s second downtown, but recognized as a truly unique development in the state of Texas. Located in the high-tech submarket of North/Domain, the high-density, mixed-use center is bordered on the west by Union Pacific Railroad, on the west and north by Loop 1, on the south by Braker Lane, and on the east by Burnet Road.
The Simon Property Group and the Endeavor Real Estate Group originally began the development of The Domain back in 2003. The first phase of the project opened in 2007, and included 700,000 sq. ft. of office, retail, multifamily, and hotel space. An extra 45 acres was later acquired, which would become The Domain II (Domain Crossing). This second phase, opened in spring 2008, added an additional 350,000 sq. ft. of commercial real estate. The third and final phase of the project, the Domain NORTHSIDE, opened in fall 2016, consisting of 1.4 million sq. ft. highlighting Rock Rose, its own entertainment district. Following these expansions, The Domain has evolved into something of a small city, buzzing with business and commerce during the day and an active nightlife in the evening.
Research-MarketInSight-Austin-2017-AugustThis growth has led to the North/Domain submarket—which encompasses more than 7 million sq. ft. of rentable retail space, 6.5 million sq. ft. of office properties, 16 million sq. ft. of industrial/flex facilities, and close to 200 multifamily and hospitality properties—becoming increasingly more in demand.
That construction total includes Domain Tower, an 11-story, 310,000-sq.-ft. building scheduled to deliver in early 2018. Stonelake Capital Partners and HPI Real Estate Services are developing the project, which will be at 10721 Domain Drive, off MoPac Blvd. The tower will be the first office building at the Domain from a developer other than Austin-based Endeavor Real Estate Group, and the Stonelake and HPI partneship expect to build 3.5 million more sq. ft. of office, retail, multifamily and hospitality space during the next decade.
Meanwhile, Endeavor Real Estate Group has recently announced the upcoming start of Domain 11, a 16-story, 324,000-sq.-ft. office building located within The Domain submarket. The project is 98% pre-leased by HomeAway, the Austin-based leader in vacation rentals. Construction is scheduled to begin in Q3 2017, with a late-2018 targeted delivery date. In addition to breaking ground on Domain 11, pre-development work at Domain 12, a planned 306,000-sq.-ft. office tower adjacent to Domain 11, is active with prospective tenant interest.
Tenants in the 291,000-sq.-ft. Domain 8 that delivered earlier this year include two of the major names in the tech industry — Amazon and Facebook. Tech companies with office already in the Domain are: Blackbaud, Accruent, HomeAway, and Q1 Media. In addition to its 1.5 million sq. ft. of office space, the Domain has more than 50 restaurants; 1.8 million sq. ft. of retail space; 2,700 apartments; and 775 hotel rooms.
With plenty of market demand for its high-end space, The Domain is said by some to be among the most compelling current real estate stories in Austin. While it will never compete in size with downtown Austin, North Austin’s “new downtown” may be a more appropriate designation. In other circles, it has been compared to the upscale mixed-use urban Galleria developments in both Houston and Dallas. Favorable comparisons in that vein further underscore why the North/Domain submarket’s momentum remains hot and shows few signs of cooling down.
And lastly, the Texas Workforce Commission reported the unemployment rate in the Austin-Round Rock MSA inched up from 3.2% in May 2017 to 3.4% in June 2017. The region’s unemployment remained more than one point below both the Texas (4.7%) and national (4.5%) rates.