Another new building is now officially under construction in downtown Austin.
Trammell Crow Company is building a new office building at the site of the old Ashbel Smith Hall, which was imploded back in March. It’s at the intersection of W. 6th and Lavaca Streets.
The 36-story building will be called Block 71, and even though it won’t open until 2021, the developer announced Thursday about half of it is leased already.
The job site called Indeed signed a lease to occupy the top 10 floors.
“It’s an important milestone because it allows us to commence construction on this very important project,” said Brad Maples, principal at Trammell Crow Company. He said the demand for office space in downtown has been tremendous. “Our view of the downtown Austin market is favorable,” Maples said.
CBRE is the company that represented Trammell Crow Company in the deal with Indeed. Troy Holme, executive vice president, said it’s common for companies to pre-lease years before a building actually opens.
Holme is expecting the demand to continue to grow. Even with the rising rent, he said he hasn’t seen companies shy away from downtown at all. “We haven’t seen that,” Holme said. “It’s actually been sort of reverse.”
Holme explained office space in Austin’s Central Business District is about 94 percent occupied. He added each year, new companies occupy about 500,000 to 600,000 square feet of office space in downtown.
“We haven’t seen this much growth in about 10 years,” said Molly Alexander, executive VP of Economic Development with the Downtown Austin Alliance. “When we think about one new office building like the Frost Bank building that went up in 2003, we’ve had 3 times that growth since then.”
According to the Downtown Austin Alliance, 12 development projects were completed in 2017, totaling 2.6 million square feet.
Recent lease transactions of 50,000 square feet or more include companies like Google, Facebook, WeWork, Teacher Retirement System of Texas and Bank of America.
The Downtown Alliance also said 14 projects are under construction, and 30 more are planned.
“We’re building a brand new city,” Alexander said.