AUSTIN: It's About the Lifestyle
Tech is absolutely going vertical in Austin, says ECR’s Patrick Ley (here volunteering at the Ronald McDonald House of Austin with colleague Jason Steinberg), and that’s not just because there aren’t many warehouses to revamp there. He says it’s all about lifestyle—tech companies have a reputation for having a good time and offering amenities. A mixed-use environment is a great way to deliver that, which has many tech users flocking to Austin’s CBD. The average tech employee is 27, and can’t resist the ability to meander downstairs to happy hour and then walk home.
Many of the big names already office in Austin high-rises (Facebook’s been in the one pictured there since 2010), and most of those are expanding. Google just leased two floors in its second local high-rise, and is rumored to be eyeing up to 100k SF Downtown. Dropbox is completely revamping a building Downtown to expand from 30 to 200 employees. And the names keep rolling in, Patrick says. It’s rumored WeWork is searching for 50k SF, and MapMy Fitness has supposedly inked 35k SF in the Seaholm Power Plant redevelopment under construction now. Patrick says the increased activity is partially a domino effect: Once one tech company proves it can thrive in a high-rise, others follow.
Parkway Properties, which owns half of Austin CBD’s Class-A office product, already hosts eight floors of creative class in its 300 West 6th tower, and it has over 100k SF of active creative/tech deals in play (including some very recognizable names). We snapped directors of leasing Andy Smith and Mark Miller bookending managing director Mike Fransen showing off one way it’s attracting these users—building its own creative office in Austin’s iconic Frost Bank Tower. It's less than half the size of the previous leasing/management office and will have the more collaborative, open layout. Features include exposed ceilings and retro lighting tech companies often favor to show them they can be funky even in a high-rise. In the same vein, Parkway is revamping its retail effort, partnering with Live Oak with an emphasis on quirky local retailers to better serve the new wave of creative office users. (Forget Dunkin Donuts—Frost has a Houndstooth Coffee with a cult following.)
The trio tells us going into institutional property has one significant draw for tech companies: Portfolio landlords like Parkway can offer growth opportunities they can’t find in a warehouse. That’s a fantastic perk for tech companies in their early days of explosive growth. And Mike says the vertical trend works in Austin because its casual atmosphere means the creative class and professional services can coexist quite nicely. (Austin’s lawyers might not wear flip flops, but they also don’t wear ties.)