Related Companies is continuing to grow its real estate footprint in Austin, Texas, a city that has exploded in growth over the past decade. The New York-based firm led by Stephen Ross recently acquired a six-acre site just south of downtown and announced two office developments in the same neighborhood. The commercial real estate firm owns properties in major cities around the country, with an especially large presence in New York City, Boston, and the Miami area. Related’s latest projects in Austin indicate that the firm is betting big on the city, which has been a magnet for major industry players.
The six-acre site Related acquired for $65 million was bought out of bankruptcy and currently has apartments and two commercial buildings with more than 70,000 square feet of commercial space. Related hasn’t yet said what it will do with the property. Nearby, the firm is developing two “category defying” office projects, according to a press release. One Ladybird Lake will be the city’s first office building on the lake’s waterfront and will have 475,000 square feet of space. The other project, 901 South Congress, is a boutique office building with a little over 100,000 square feet of space that will be built with mass timber, marking Related’s first mass timber project. The forthcoming properties are the first office projects Related has undertaken in Austin, where the company already owns and manages hundreds of affordable housing units in and around the city.
Austin’s office market is still performing quite well and has one of the highest occupancy rates in the country, despite recent layoffs that have shaken up the city’s tech sector. Related’s Austin expansion is not entirely surprising, given how popular the city has been in recent years with major real estate owners and developers. Just this month, life sciences giant Alexandria Real Estate Equities purchased an office building in downtown Austin for $108 million, and last year, Kilroy Realty made its entry into the city with the $580 million acquisition of the Indeed Tower, the largest office building in Austin. Sunbelt cities like Austin have been hotspots for investment over the last couple years, bolstered by pandemic-era migration from higher-cost coastal cities like Los Angeles and New York. However, recent reports that show a cooling housing market in Sunbelt cities may indicate the region’s hot streak is slowing down. Whether or not major Sunbelt markets generate less interest from real estate investors, Related’s latest moves indicate the firm is betting big on Austin’s future.