Google to set sail in 35-story downtown Austin tower
After several delays over the past couple of years, Google Inc. has confirmed it will finally be moving into the high-profile, 35-story sail-shaped tower in downtown Austin this year.
'We look forward to opening our new Austin office at 601 W 2nd this year that deepens our longstanding commitment to Texas and the local community," Ryan Lamont, a Google spokesperson, said via email Tuesday.
Six years ago, Google signed a lease for the entire building overlooking Lady Bird Lake. Completed in 2022, the building — one of the newest and most recognizable on Austin's skyline — is leased to Google through 2038.
But the sail-shaped tower has sat empty due to the new world order that has defined the office market since the COVID-19 pandemic ushered in remote and hybrid work. Work-from-home has led to rising vacancy rates in many office buildings, both in Austin and around the country.
On Tuesday, Google declined to say how many employees will be making the move into the Sail Tower, or when exactly that move will take place. The company also declined release an updated Austin headcount. One published report put the number at about 2,000 employees.
Google had 183,323 employees globally, according to the company's latest annual report.
More: Tech giant Google cuts hundreds of recruiters in recent layoffs; Austin impact unknown
Atlanta-based Cousins Property, a real estate investment trust, bought the so-called Sail Tower in December for a net purchase price of $521.8 million. The acquisition was the biggest sale of an office property in Austin in 2024.
Cousins is the largest office owner in the Austin market with more than 5 million square feet of primely located office space, including downtown and at the Domain mixed-use development in North Austin.
More: IBM signs lease for entire 15-story office tower at Austin's Domain mixed-use development
Google did not comment on the status of any of its other office leases in Austin, including those previously reported at 500 W. Second St., next to the sail-shaped building, and at the Saltillo mixed-use project in East Austin.
Google has called Texas home since 2007.
More: Google leasing big chunk of new downtown Austin tower
"We have an office presence across the state in Austin, Dallas and Houston, as well as a data center in Midlothian and a new planned data center in Red Oak," Lamont said Tuesday.
Dallas-based Trammell Crow Co. and MSD Capital began construction on the sail-shaped tower in January 2019. MSD invests on behalf of Dell Technologies founder and CEO Michael Dell, his family and other investors.
The 804,000-square-foot Sail Tower at West Cesar Chavez and Nueces streets is near the Second Street entertainment district downtown, and it has unobstructed views of Lady Bird Lake. It is just a few blocks from Cousins' existing downtown Austin office-building portfolio, which has 1.7 million square feet of space.
"We are thrilled to add this iconic office property, with a strong investment grade customer, to our Austin portfolio," Colin Connolly, president and chief executive officer of Cousins Properties, said in a statemen in December. "Austin continues to exhibit strong demand fundamentals, attracting top talent and growing companies. This exciting transaction enables Cousins to enhance the quality of our leading lifestyle office portfolio and is immediately accretive to earnings."
In North Austin, Cousins also is the largest owner of office space in the large, mixed-use Domain project, where Cousins' office holdings total about 2.5 million square feet of space across 11 buildings.
More: Apartment tower to kick off Green Water redevelopment
Eastdil Secured advised Trammell Crow in the Sail Tower purchase. The office high-rise was the last phase of a major redevelopment project that began in 2012, transforming downtown's Green Water Treatment Plant site into a large mixed-use project.Google made headlines when news broke several years ago that it would lease the entire sail-shaped tower. Austin is one of Google's largest hubs.
In June 2023, a Google spokeswoman said in an email that as the company worked "to ensure that our real estate investments match the needs of our hybrid workforce, we're delaying moving into our leased space in 601 W. 2nd Street. We remain committed to our longstanding presence in Austin and investing in the local community."The spokeswoman said: "The lease on our space in 100 Congress expires in September 2023, which provided an opportunity for a careful review of our real estate footprint in Austin. Our analysis confirmed that we're able to accommodate our current space needs within our existing offices at 901 E. 5th St. and 500 West 2nd St."
After the sail building, the second-largest office sale in Austin last year was for the Mueller Business District Bravo Building, a new 245,000-square-foot building in East Austin, acquired by the Teachers Retirement System of Texas in March.
Before the sail-building purchase, Cousins made news when IBM said it would lease an entire 15-story office tower with 320,000 square feet of space in a Cousins' building at the Domain. IBM took over the lease from Meta Platforms, Facebook's parent company. IBM will assume the lease Jan. 1, 2026, and extend its term from 2031 to 2040. Other Cousins tenants at the Domain include Amazon, Expedia, Adobe and Fidelity.
When Cousins bought Sail Tower, office brokers said it marked a milestone for the local office market, which has been in a slump like many office markets as employees have worked from home or on a hybrid basis.
More: Almost a quarter of Austin-area office space sits empty, but the news isn't all bleak
'It's a testament to the confidence Cousins Properties and other office owners/investors have in the Austin market, despite ongoing challenges," Rick Whiteley, executive director of commercial real estate services firm Cushman & Wakefield, said in December.
With Google as a tenant, "some of the transaction's risk is obviously mitigated," Whiteley said. "However, a sale of this magnitude indicates a bullish outlook on the long-term future of the Austin office market."
This article originally appeared on Austin American-Statesman: Googlers due to move into sail-shaped downtown Austin tower this year
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Hill
26 minutes ago
- The Hill
How the Vatican manages money and where Pope Leo XIV might find more
VATICAN CITY (AP) — The world's smallest country has a big budget problem. The Vatican doesn't tax its residents or issue bonds. It primarily finances the Catholic Church's central government through donations that have been plunging, ticket sales for the Vatican Museums, as well as income from investments and an underperforming real estate portfolio. The last year the Holy See published a consolidated budget, in 2022, it projected 770 million euros ($878 million), with the bulk paying for embassies around the world and Vatican media operations. In recent years, it hasn't been able to cover costs. That leaves Pope Leo XIV facing challenges to drum up the funds needed to pull his city-state out of the red. Anyone can donate money to the Vatican, but the regular sources come in two main forms. Canon law requires bishops around the world to pay an annual fee, with amounts varying and at bishops' discretion 'according to the resources of their dioceses.' U.S. bishops contributed over one-third of the $22 million (19.3 million euros) collected annually under the provision from 2021-2023, according to Vatican data. The other main source of annual donations is more well-known to ordinary Catholics: Peter's Pence, a special collection usually taken on the last Sunday of June. From 2021-2023, individual Catholics in the U.S. gave an average $27 million (23.7 million euros) to Peter's Pence, more than half the global total. American generosity hasn't prevented overall Peter's Pence contributions from cratering. After hitting a high of $101 million (88.6 million euros) in 2006, contributions hovered around $75 million (66.8 million euros) during the 2010's then tanked to $47 million (41.2 million euros) during the first year of the COVID-19 pandemic, when many churches were closed. Donations remained low in the following years, amid revelations of the Vatican's bungled investment in a London property, a former Harrod's warehouse that it hoped to develop into luxury apartments. The scandal and ensuing trial confirmed that the vast majority of Peter's Pence contributions had funded the Holy See's budgetary shortfalls, not papal charity initiatives as many parishioners had been led to believe. Peter's Pence donations rose slightly in 2023 and Vatican officials expect more growth going forward, in part because there has traditionally been a bump immediately after papal elections. The Vatican bank and the city state's governorate, which controls the museums, also make annual contributions to the pope. As recently as a decade ago, the bank gave the pope around 55 million euros ($62.7 million) a year to help with the budget. But the amounts have dwindled; the bank gave nothing specifically to the pope in 2023, despite registering a net profit of 30 million euros ($34.2 million), according to its financial statements. The governorate's giving has likewise dropped off. Some Vatican officials ask how the Holy See can credibly ask donors to be more generous when its own institutions are holding back. Leo will need to attract donations from outside the U.S., no small task given the different culture of philanthropy, said the Rev. Robert Gahl, director of the Church Management Program at Catholic University of America's business school. He noted that in Europe there is much less of a tradition (and tax advantage) of individual philanthropy, with corporations and government entities doing most of the donating or allocating designated tax dollars. Even more important is leaving behind the 'mendicant mentality' of fundraising to address a particular problem, and instead encouraging Catholics to invest in the church as a project, he said. Speaking right after Leo's installation ceremony in St. Peter's Square, which drew around 200,000 people, Gahl asked: 'Don't you think there were a lot of people there that would have loved to contribute to that and to the pontificate?' In the U.S., donation baskets are passed around at every Sunday Mass. Not so at the Vatican. The Vatican has 4,249 properties in Italy and 1,200 more in London, Paris, Geneva and Lausanne, Switzerland. Only about one-fifth are rented at fair market value, according to the annual report from the APSA patrimony office, which manages them. Some 70% generate no income because they house Vatican or other church offices; the remaining 10% are rented at reduced rents to Vatican employees. In 2023, these properties only generated 35 million euros ($39.9 million) in profit. Financial analysts have long identified such undervalued real estate as a source of potential revenue. But Ward Fitzgerald, the president of the U.S.-based Papal Foundation, which finances papal charities, said the Vatican should also be willing to sell properties, especially those too expensive to maintain. Many bishops are wrestling with similar downsizing questions as the number of church-going Catholics in parts of the U.S. and Europe shrinks and once-full churches stand empty. Toward that end, the Vatican recently sold the property housing its embassy in Tokyo's high-end Sanbancho neighborhood, near the Imperial Palace, to a developer building a 13-story apartment complex, according to the Kensetsu News trade journal. Yet there has long been institutional reluctance to part with even money-losing properties. Witness the Vatican announcement in 2021 that the cash-strapped Fatebenefratelli Catholic hospital in Rome, run by a religious order, would not be sold. Pope Francis simultaneously created a Vatican fundraising foundation to keep it and other Catholic hospitals afloat. 'They have to come to grips with the fact that they own so much real estate that is not serving the mission of the church,' said Fitzgerald, who built a career in real estate private equity. ___ AP reporter Mari Yamaguchi in Tokyo contributed. ___ Associated Press religion coverage receives support through the AP's collaboration with The Conversation US, with funding from Lilly Endowment Inc. The AP is solely responsible for this content.
33 minutes ago
How the Vatican manages money and where Pope Leo XIV might find more
VATICAN CITY -- The world's smallest country has a big budget problem. The Vatican doesn't tax its residents or issue bonds. It primarily finances the Catholic Church's central government through donations that have been plunging, ticket sales for the Vatican Museums, as well as income from investments and an underperforming real estate portfolio. The last year the Holy See published a consolidated budget, in 2022, it projected 770 million euros ($878 million), with the bulk paying for embassies around the world and Vatican media operations. In recent years, it hasn't been able to cover costs. That leaves Pope Leo XIV facing challenges to drum up the funds needed to pull his city-state out of the red. Anyone can donate money to the Vatican, but the regular sources come in two main forms. Canon law requires bishops around the world to pay an annual fee, with amounts varying and at bishops' discretion 'according to the resources of their dioceses.' U.S. bishops contributed over one-third of the $22 million (19.3 million euros) collected annually under the provision from 2021-2023, according to Vatican data. The other main source of annual donations is more well-known to ordinary Catholics: Peter's Pence, a special collection usually taken on the last Sunday of June. From 2021-2023, individual Catholics in the U.S. gave an average $27 million (23.7 million euros) to Peter's Pence, more than half the global total. American generosity hasn't prevented overall Peter's Pence contributions from cratering. After hitting a high of $101 million (88.6 million euros) in 2006, contributions hovered around $75 million (66.8 million euros) during the 2010's then tanked to $47 million (41.2 million euros) during the first year of the COVID-19 pandemic, when many churches were closed. Donations remained low in the following years, amid revelations of the Vatican's bungled investment in a London property, a former Harrod's warehouse that it hoped to develop into luxury apartments. The scandal and ensuing trial confirmed that the vast majority of Peter's Pence contributions had funded the Holy See's budgetary shortfalls, not papal charity initiatives as many parishioners had been led to believe. Peter's Pence donations rose slightly in 2023 and Vatican officials expect more growth going forward, in part because there has traditionally been a bump immediately after papal elections. The Vatican bank and the city state's governorate, which controls the museums, also make annual contributions to the pope. As recently as a decade ago, the bank gave the pope around 55 million euros ($62.7 million) a year to help with the budget. But the amounts have dwindled; the bank gave nothing specifically to the pope in 2023, despite registering a net profit of 30 million euros ($34.2 million), according to its financial statements. The governorate's giving has likewise dropped off. Some Vatican officials ask how the Holy See can credibly ask donors to be more generous when its own institutions are holding back. Leo will need to attract donations from outside the U.S., no small task given the different culture of philanthropy, said the Rev. Robert Gahl, director of the Church Management Program at Catholic University of America's business school. He noted that in Europe there is much less of a tradition (and tax advantage) of individual philanthropy, with corporations and government entities doing most of the donating or allocating designated tax dollars. Even more important is leaving behind the 'mendicant mentality' of fundraising to address a particular problem, and instead encouraging Catholics to invest in the church as a project, he said. Speaking right after Leo's installation ceremony in St. Peter's Square, which drew around 200,000 people, Gahl asked: 'Don't you think there were a lot of people there that would have loved to contribute to that and to the pontificate?' In the U.S., donation baskets are passed around at every Sunday Mass. Not so at the Vatican. The Vatican has 4,249 properties in Italy and 1,200 more in London, Paris, Geneva and Lausanne, Switzerland. Only about one-fifth are rented at fair market value, according to the annual report from the APSA patrimony office, which manages them. Some 70% generate no income because they house Vatican or other church offices; the remaining 10% are rented at reduced rents to Vatican employees. In 2023, these properties only generated 35 million euros ($39.9 million) in profit. Financial analysts have long identified such undervalued real estate as a source of potential revenue. But Ward Fitzgerald, the president of the U.S.-based Papal Foundation, which finances papal charities, said the Vatican should also be willing to sell properties, especially those too expensive to maintain. Many bishops are wrestling with similar downsizing questions as the number of church-going Catholics in parts of the U.S. and Europe shrinks and once-full churches stand empty. Toward that end, the Vatican recently sold the property housing its embassy in Tokyo's high-end Sanbancho neighborhood, near the Imperial Palace, to a developer building a 13-story apartment complex, according to the Kensetsu News trade journal. Yet there has long been institutional reluctance to part with even money-losing properties. Witness the Vatican announcement in 2021 that the cash-strapped Fatebenefratelli Catholic hospital in Rome, run by a religious order, would not be sold. Pope Francis simultaneously created a Vatican fundraising foundation to keep it and other Catholic hospitals afloat. 'They have to come to grips with the fact that they own so much real estate that is not serving the mission of the church,' said Fitzgerald, who built a career in real estate private equity. ___
Boston Globe
43 minutes ago
- Boston Globe
How the Vatican manages money and where Pope Leo XIV might find more
That leaves Pope Leo XIV facing challenges to drum up the funds needed to pull his city-state out of the red. Withering donations Anyone can donate money to the Vatican, but the regular sources come in two main forms. Advertisement Canon law requires bishops around the world to pay an annual fee, with amounts varying and at bishops' discretion 'according to the resources of their dioceses.' U.S. bishops contributed over one-third of the $22 million (19.3 million euros) collected annually under the provision from 2021-2023, according to Vatican data. Get Starting Point A guide through the most important stories of the morning, delivered Monday through Friday. Enter Email Sign Up The other main source of annual donations is more well-known to ordinary Catholics: Peter's Pence, a special collection usually taken on the last Sunday of June. From 2021-2023, individual Catholics in the U.S. gave an average $27 million (23.7 million euros) to Peter's Pence, more than half the global total. American generosity hasn't prevented overall Peter's Pence contributions from cratering. After hitting a high of $101 million (88.6 million euros) in 2006, contributions hovered around $75 million (66.8 million euros) during the 2010's then tanked to $47 million (41.2 million euros) during the first year of the COVID-19 pandemic, when many churches were closed. Advertisement Donations remained low in the following years, amid revelations of the Vatican's bungled investment in a London property, a former Harrod's warehouse that it hoped to develop into luxury apartments. The scandal and ensuing trial confirmed that the vast majority of Peter's Pence contributions had funded the Holy See's budgetary shortfalls, not papal charity initiatives as many parishioners had been led to believe. Peter's Pence donations rose slightly in 2023 and Vatican officials expect more growth going forward, in part because there has traditionally been a bump immediately after papal elections. New donors The Vatican bank and the city state's governorate, which controls the museums, also make annual contributions to the pope. As recently as a decade ago, the bank gave the pope around 55 million euros ($62.7 million) a year to help with the budget. But the amounts have dwindled; the bank gave nothing specifically to the pope in 2023, despite registering a net profit of 30 million euros ($34.2 million), according to its financial statements. The governorate's giving has likewise dropped off. Some Vatican officials ask how the Holy See can credibly ask donors to be more generous when its own institutions are holding back. Leo will need to attract donations from outside the U.S., no small task given the different culture of philanthropy, said the Rev. Robert Gahl, director of the Church Management Program at Catholic University of America's business school. He noted that in Europe there is much less of a tradition (and tax advantage) of individual philanthropy, with corporations and government entities doing most of the donating or allocating designated tax dollars. Advertisement Even more important is leaving behind the 'mendicant mentality' of fundraising to address a particular problem, and instead encouraging Catholics to invest in the church as a project, he said. Speaking right after Leo's installation ceremony in St. Peter's Square, which drew around 200,000 people, Gahl asked: 'Don't you think there were a lot of people there that would have loved to contribute to that and to the pontificate?' In the U.S., donation baskets are passed around at every Sunday Mass. Not so at the Vatican. Untapped real estate The Vatican has 4,249 properties in Italy and 1,200 more in London, Paris, Geneva and Lausanne, Switzerland. Only about one-fifth are rented at fair market value, according to the annual report from the APSA patrimony office, which manages them. Some 70% generate no income because they house Vatican or other church offices; the remaining 10% are rented at reduced rents to Vatican employees. In 2023, these properties only generated 35 million euros ($39.9 million) in profit. Financial analysts have long identified such undervalued real estate as a source of potential revenue. But Ward Fitzgerald, the president of the U.S.-based Papal Foundation, which finances papal charities, said the Vatican should also be willing to sell properties, especially those too expensive to maintain. Many bishops are wrestling with similar downsizing questions as the number of church-going Catholics in parts of the U.S. and Europe shrinks and once-full churches stand empty. Toward that end, the Vatican recently sold the property housing its embassy in Tokyo's high-end Sanbancho neighborhood, near the Imperial Palace, to a developer building a 13-story apartment complex, according to the Kensetsu News trade journal. Advertisement Yet there has long been institutional reluctance to part with even money-losing properties. Witness the Vatican announcement in 2021 that the cash-strapped Fatebenefratelli Catholic hospital in Rome, run by a religious order, would not be sold. Pope Francis simultaneously created a Vatican fundraising foundation to keep it and other Catholic hospitals afloat. 'They have to come to grips with the fact that they own so much real estate that is not serving the mission of the church,' said Fitzgerald, who built a career in real estate private equity.
