Latest news with #StateofDowntown
Yahoo
3 days ago
- Business
- Yahoo
Report: Slower economy doesn't dim downtown Austin's dynamism
Despite economic headwinds that have pushed office vacancies into double digits and slowed new development, downtown Austin hasn't lost its luster. That's the picture painted by the latest 'State of Downtown' report from the Downtown Austin Alliance, released last week. While slower, growth in the city's central business district is still being fueled by new developments and population growth, even as businesses adapt to changing market conditions, alliance officials said. Although downtown may be navigating a market correction, the area has "remained dynamic," said Whitney Knight, the alliance's board chair. "While new construction has slowed, this pause offers a chance to focus on quality over quantity, to activate what we've already built, and to lay the groundwork for what's next," Knight said. Still, downtown — bounded by Lady Bird Lake to the south, Interstate 35 to the east, Lamar Boulevard to the west and Martin Luther King Jr. Boulevard to the north — hasn't stopped growing. "Although office and residential vacancies increased this year, demand is still high for working and living downtown. There is more space to fill, but downtown's workforce and population are growing, and lower rates enable more people to find a place here. The hotel and retail markets enjoyed steady performance this year, although these are both navigating emerging economic challenges," the report said. "People are attracted to its diverse mix of events, arts and entertainment, recreation and industries and opportunities.' David Barbour, president and CEO of the Downtown Austin Alliance, who has lived and worked in downtown locations across the country, said the group will "double down on what makes downtown Austin great — its vibe, vitality and collaborative spirit," while continuing to "address issues that challenge its full potential: affordability, homelessness, safety and access." The Downtown Austin Alliance works with downtown property owners, residents, businesses, community organizations and government leaders to enhance the appeal of the central business district, which Mayor Kirk Watson called the city's "living room" more than two decades ago during his previous tenure as mayor. On Tuesday, Barbour was the keynote speaker at the alliance's "Future of Downtown" event held at the ACL Live at The Moody Theater downtown. 'Downtown is the cultural and economic heartbeat of our city,' Barbour said in a statement issued after the event. "This is a place where creativity thrives, businesses grow, and everyone is welcome. As we navigate major infrastructure projects, new development and population growth, our focus is on keeping downtown accessible, vibrant and open to all." The alliance has produced its "State of Downtown" report since 2019, tracking key data points on trends and economic indicators in sectors including downtown's office, hotel, residential and retail markets. Below are highlights, along with excerpts from the report elaborating on its findings. The office market vacancy rate downtown is nearly 22%, reflecting the continued work-from-home or hybrid work models post-COVID. In 2019, pre-pandemic, downtown's office vacancy rate was 3.9%, according to CoStar data the report cited. More: Austin's downtown commercial, office space seeing record vacancy rates. What comes next? "The office market continues to transform in response to companies' changing needs for space. Vacancy rates have risen over the past five years, and combined with rising inflation and interest rates, this has led to a halt in developers breaking ground on new office construction," the report said. "The era of tech giants dominating entire buildings is fading, opening opportunities for a wider range of businesses to access downtown's prime location. This diversification is a source of stability for downtown Austin." Downtown is home to 15,330 residents and 12,720 residential units. With more than 2,600 new residential units in the pipeline, increasing supply by about 28%, downtown's appeal as a vibrant urban neighborhood continues to grow. More: Demand for office space continues to struggle, while downtown Austin living in high demand "Although developers and owners have experienced some headwinds, added concessions like incentives and discounts have created an opportunity for a wider range of individuals and families to live downtown," the report said. Rental prices downtown remain above pre-pandemic levels but have dropped from their 2022 peaks due to a surge in new apartment supply driving competitive pricing. The apartment vacancy rate has increased to 12.7%, up from 9.7% in 2019. Higher capital and materials costs, along with decreased demand, have slowed new construction, but more than 1,400 units are expected to be completed in 2025, maintaining pressure on property owners to stay competitive. "Austin had the largest decline in median asking rent of 44 major U.S. metros analyzed by Redfin in January 2025," the report said. "The main driver of this decrease is that Austin has built new apartments at a far greater rate than other cities." Interest rate hikes over the past three years have cooled the housing market from the post-pandemic buying frenzy. Prices have softened slightly, and average days on market increased from 84 in 2023 to 123 in 2024. "The condo market has transitioned from a sellers' market to a buyers' market, and this trend is expected to continue as more units are delivered to the market," the report said. More: The Modern, a 56-story condo high-rise in downtown Austin, marks construction milestone Downtown's development pipeline has contracted over the past two years, a trend expected to continue throughout 2025. "Like other cities across the nation, Austin is experiencing the impact of larger macroeconomic forces such as increased interest rates and inflation. We have also experienced such a boom that a slowdown is an inevitable and healthy phase of sustainable growth," the report said. "This slowdown allows the market to absorb its recently built projects, ensuring buildings are fully utilized and contributing to the vibrancy of our urban core." Eight projects are due to wrap up this year, adding about 3.9 million square feet of space. Notable developments include the Republic office tower, which has attracted tenants, and the Waterline, which will be downtown's tallest tower and an iconic landmark alongside the Independent and Frost Bank Tower. In 2024, five projects totaling 1.11 million square feet were completed. At the end of March, 13 projects were under construction totaling 6.6 million square feet: 1.3 million in office space, 2.6 million in mixed-use, nearly 2 million in residential, and 653,500 in hotel space. These figures reflect a slowdown in private development while public infrastructure investment ramps up. Several major infrastructure and mobility projects are either under construction or breaking ground soon. These include I-35 Capital Express Central, Project Connect, Waterloo Greenway, Capitol Complex Project and the new Austin Convention Center. Convention Center Closed for demolition in April 2025, the Convention Center is set to reopen in late 2028 ahead of the 2029 spring festival season. The $1.6 billion project is funded by hotel occupancy tax and Convention Center revenue. Capitol ComplexPhase II will deliver 525,000 square feet of office space and complete the Capitol Mall, providing a continuous connection from the Capitol to the UT campus. Completion is anticipated in late 2026. Project Connect Phase I light rail will cover 9.8 miles in Austin with four key stations within the downtown footprint. Waterloo GreenwayPhase II will add nearly 1,550 new trees, 200,000 mature plants and 10 acres of seed mix. The job market downtown and citywide continues to be strong, the report said. The Austin metro area's unemployment rate fell slightly from 3.4% in January 2024 to 3.1% in January 2025, remaining below state and national levels. Despite layoffs at some large tech companies, downtown employment has grown steadily over the past four years and is now 14% higher than its early 2020 peak. Downtown's hotel occupancy rate is now 55.8%, down from 72.6% in 2019, according to CoStar figures. "Although the demand for downtown hotel space increased by 3.6% over the past year, the market is beginning to soften as the supply of new rooms begins to outpace demand," the report stated. "The Austin Convention Center closed in April 2025 for their 4-year reconstruction, and hotel operators are cautiously optimistic as conventions and large meetings move to area hotels." Retail occupancy rates have stayed steady over the last year, remaining above 97%, and tenant demand for downtown locations remains strong, the report said. Downtown's retail market bucked the general trend, with storefronts almost fully occupied at 97% — about the same level as before the pandemic, when the retail occupancy rate was 96.8%. "However, rising construction and labor costs have created a significant hurdle for some businesses to make the tenant improvements needed to enter the market," the report said. "This also puts financial pressure on landlords, who increasingly need to make concessions to close deals. Addressing these cost challenges would unlock even greater potential, allowing more businesses to follow their desire to be in the heart of Austin." Residents: 15,330 Employees: 131,833 Residential units: 12,720 Hotel rooms: 15,000+ Sq. ft. under construction: 6,632,922 Sq. ft. of planned space: 11,538,073 Source: U.S. Census Bureau; Downtown Austin Alliance This article originally appeared on Austin American-Statesman: Report: Despite challenges, downtown Austin hasn't lost its allure
Yahoo
5 days ago
- Business
- Yahoo
Office vacancy rises downtown, overall employment up report says
AUSTIN (KXAN) — Downtown Austin has entered a 'period of correction,' according to the Downtown Austin Alliance's 2025 economic impact report, with office vacancy around 22%. The report addresses things like: Past and ongoing projects Mobility Residential life Development Workforce Public Safety Culture 'Downtown is the cultural and economic heartbeat of our city,' Davon Barbour, president and CEO of the Downtown Austin Alliance said. 'This is a place where creativity thrives, businesses grow, and everyone is welcome. As we navigate major infrastructure projects, new development and population growth, our focus is on keeping downtown accessible, vibrant and open to all.' The boundaries of downtown, for the purpose of the report, is officially defined by the map below. The three primary industries utilizing office space downtown are financial services, professional services and law firms, according to the report. The DAA recognizes the changing needs for office space that have arisen since the pandemic, with more companies opting for remote or hybrid work models. This was also something heavily discussed in last year's State of Downtown report. Office vacancy rose from 17.3% in 2023 to 22% in 2024, and employees have returned to the office at 67% of 2019 levels. As the DAA recognizes this number highlights a steady shift in workplace trends, the organization is working to modify its office-space offerings. 'Although companies are seeking less space, they are prioritizing modern design and amenities to attract employees and clients; downtown officers a wealth of cutting-edge options,' the report reads. Downtown employment has increased by 14% since 2020. The below chart breaks that down. The building of the new convention center, which officially started last month, as well as other major downtown projects, 'will make downtown more vibrant and inclusive in the long term, [but] the interim construction and closures will affect how people move through and enjoy downtown. This will require city leaders to proactively address accessibility and minimize any potential negative impacts.' The current plan is to have the new facility done in late 2028 ahead of the 2029 spring festival season, which includes SXSW. 'In anticipation of the Convention Center's closure, we are actively workingwith partners to identify and inform the community on how downtown can continue to support festivals through small, local venues,' the DAA stated in the report. The DAA also said event organizers who usually use the convention center have reached out to nearby hotels about hosting events in the interim. The DAA has held several meetings over the last year and a half with the Austin Police Department (APD), security providers, government officials, residents and business owners and employees to address downtown safety concerns. This includes dedicated safety officers who patrol the area on bikes. While they don't have the authority to make arrests, they can assist in getting people off of private property if issues arise, and bridge the gap between the community and the police department. The team includes 25 staff members. Bike patrols run from 6 a.m. to 10 p.m. daily. Additionally, one person works overnight at Republic Square Park, and another staffer patrols from 5 p.m. to 3 a.m. Wednesday-Sunday in a marked vehicle. The report noted the two following trends when it comes to downtown crime: Crimes against people, property (e.g. attacks, burglaries) have decreased since 2019 Class C misdemeanor ordinance violations (e.g. camping in public, lying in rights of way, aggressive solicitation) have increased Crimes against society (drug crimes, weapons violations) have increased Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Yahoo
27-04-2025
- Entertainment
- Yahoo
First-of-the-month street party returns to downtown Fresno. But is it ArtHop?
Fabio Linares saw the end coming. As a vintage clothing retailer, he saw up close the rapid growth — and eventual implosion — of downtown Fresno's art gallery open house as it evolved into a full-blown street party. It was the driving force that allowed him to move his shop, Bad Kids Club, into an actual retail space. The business, which started as a pop-up on the street outside the Warnor's Theatre complex moved inside the Mammoth Mall on Fulton Street mostly thanks to the community of people who came out on the first Thursday of each month to celebrate what had become colloquially known as ArtHop. 'I saw it blow up,' Linares says. 'I saw it like a forest fire.' He remembers telling people it wasn't going to last. And it didn't. In July, the city announced its intent to regulate the event over concerns of safety and the trash left by up to 15,000 mostly younger people who flooded the stretch of Fulton from Mono Street to Tuolumne. It forced vendors (and musicians, performers and crowds) off of the streets and set up an alternative event for them on the third Wednesday of each month. It was felt by many as the end of ArtHop, which had been operating at venues across downtown for almost 30 years. Now, the city is rethinking that decision and looking to bring a large-scale permitted street event back to downtown at the top of each month. Fresno Mayor Jerry Dyer threw his support behind the idea at the State of Downtown event. 'Wouldn't it be amazing to bring back the street market portion of the ArtHop we all remember?' he asked, to applause from the crowd. 'We in the city are 100% committed to making that happen.' The Downtown Fresno Partnership echoed those sentiments, though it left the door open for an event outside of ArtHop night, possibly on the first Friday of each month. It held a survey to judge public opinion on the two options, saying it was 'prepared to work tirelessly in support of this event on whichever day the community chooses.' The choice, it said, is 'between either intentionally activating on ArtHop night, or bringing life to downtown on a different night.' Results of the survey are expected sometime next week. Prior to the city stepping in, all of the various events happening on the first Thursdays each month were collectively known as 'ArtHop,' whether they were officially sanctioned as such or not. That included events in the Brewery District, which were centered around food trucks and produced by Tioga-Sequoia Brewing Company and Fresno Street Eats. It also included dozens of smaller official ArtHop events happening inside downtown art galleries and studios and under under the purview of the Fresno Arts Council. There are currently 35 active ArtHop venues across downtown and they continue to operate in much the same fashion as when the event started in 1996, says Lilia Gonzales Chavez, Executive Director of the Fresno Arts Council. So, there was major confusion when the city halted the street event, she says, 'because ArtHop never left.' 'ArtHop hasn't died,' she adds. 'It took a hit because people were misinformed.' And it hasn't been alone in the struggle. For years, the first Thursday had been the busiest night of the month for businesses in the area. Some were able to make an entire month's rent off that single night. The city's alternative event, Why Not Wednesdays, cost money to produce and failed to recoup anything close to that kind of community support. Since August, businesses in the Brewery District have collectively lost anywhere from $40,000 to $50,000 a month, says Mike Cruz, president of Tioga-Sequoia Brewing Company. 'That's just on our block,' he says. 'We're all hurting, wanting that day back.' And Tioga-Sequoia isn't waiting for the city or the Downtown Fresno Partnership. It just announced the return of its first Thursday Block Party for May. The event, done in conjunction with Fresno Street Eats, will have food and vendors, art and live music and be like 'a rewind to a year ago in May,' Cruz says. Similarly, there are art galleries on the northern part of Van Ness Avenue working to coordinate other first-Thursday events. This is what should be happening, Chavez says. There was some interesting, creative work being done by young people as the first Thursday event grew along Fulton Street post pandemic, she says, pointing out the impromptu alley gatherings that popped up behind Broadway Studios. 'That was exciting,' she says, and very much in the spirit of the original ArtHop and its larger goal as part of the Arts Council. 'We led the charge and demonstrated that it was possible,' she says. Chavez welcomes the idea of a large-scale street event in downtown. She doesn't think it needs to be on the first Thursdays. 'It isn't consistent with the hop,' part of ArtHop, she says. 'It was intended that people would move from one gallery space to another, from one part of downtown to another.' For his part, Linares publicly supported Why Not Wednesday and took to social media last week to answer questions about the possible return to Thursday night. He says regulating the event did allow the city to look at, and address, some real issues that came with having massive crowds downtown. The formula was there. 'The problem is: The community wasn't for it,' he says. 'It's just not on the day the people want.' So, he will support whatever this new first Thursday event becomes, if the city allows it and its has strong community support. Because while ArtHop has different meanings to different people, the underlying tie is the idea of having a vibrant downtown. Much of this is about who controls the marketing. He likens it to the NFL's control over its biggest game of the year. 'If you're a bar owner, the NFL doesn't want you to have a Super Bowl party,' he says. 'But they want you to party for the Super Bowl.'
Business Journals
25-04-2025
- Business
- Business Journals
Mayor Greenberg backs massive downtown Louisville hotel project
Greenberg was once part of a group that tried to build a 62-story skyscraper at the site. Story Highlights Poe Cos. plans 1,000-room hotel on former Museum Plaza site. Mayor Greenberg supports new hotel development for downtown Louisville. State legislation allows development incentives for the project site. In 2011, arts patrons Steve Wilson and Laura Lee Brown, commercial real estate developer Steve Poe and then-attorney Craig Greenberg called it quits on a $465 million dream that would have forever altered Louisville's horizon. Museum Plaza was to be a 62-story mixed-use tower with 300,000 square feet of Class A commercial space, two hotels with more than 300 rooms and 160 luxury lofts and condominiums. But after breaking ground in 2007, construction was halted a year later amid the Great Recession and construction problems, leaving a gap on Main Street and on the city's skyline. Nearly 15 years after walking away from the site, Poe and now-Mayor Greenberg are once again looking to build on the prime Downtown lot. Business First broke the news Wednesday that Louisville-based Poe Cos. is working on plans to build a 1,000-room hotel at the vacant site next to the Muhammad Ali Center, according to several sources with knowledge of the plan, which was later confirmed by Poe Cos. expand The Main Street site currently features pickleball courts provided by the Louisville Downtown Partnership. Joel Stinnett While details of the massive hotel — which would be located between River Road, Main Street, Seventh Street, and Washington Street — are in the 'predevelopment' phases, Poe Cos. does have drawings for the project that are in an 'initial stage for budget pricing,' Hank Hillebrand, Poe Cos. president, told Louisville Business First in an email. The current plans call for a 1,000-room hotel featuring more than 100,000 square feet of meeting space and new bourbon tourism experiences. Poe Cos. has spoken to 'various' hotel brands about the project. Poe Cos. was selected to develop the site last year following a request for proposals from Louisville Metro Government. The news follows the advancement of a bill by state lawmakers that allowed development incentives in the area of Downtown Louisville around the former Museum Plaza site — which were previously off limits because of a deal struck nearly two decades ago. The measure opened up areas inside the arena's tax increment financing (TIF) district to other projects — such as the new planned hotel — seeking the same types of state tax rebates that help the KFC Yum Center pay off its construction debt. House Bill 775 was sponsored by State Rep. Jason Nemes, R-Middletown, and supported by Greenberg. expand Louisville-based Poe Cos. is working on plans to build a 1,000-room hotel at a site next to the Muhammad Ali Center. Joel Stinnett During the Louisville Downtown Partnership's State of Downtown lunch March 27, Mayor Craig Greenberg said that he asked the Kentucky General Assembly 'to help us try again to develop the vacant land of the former Museum Plaza site.' Referencing that site later in his speech he also said 'a new tower will rise above the recently flooded land next to the Muhammad Ali Center.' In a phone interview Wednesday with Business First, Greenberg talked about his support for the new hotel, why the city needs its rooms and how he would like it to connect to the community. This interview has been edited for clarity and space. How is the mayor's office assisting Poe Cos. in getting this project built? We are incredibly supportive of building a new 1,000-room convention hotel on this site. I think it would be a tremendous benefit for Downtown and our entire city and state. Louisville Tourism has made clear that our city needs more convention center hotels and the quality and size of this proposed project would be a wonderful addition. I supported legislation in the recent Kentucky General Assembly session that amended the Tax Increment Financing law to support a project like this on this site. You were involved in the original Museum Plaza project. What did you learn from that experience that can be used to get this new project across the finish line? It's a very challenging site to develop. Therefore, a strong public-private partnership is the only path forward. At the same time it's an incredibly important location for Downtown. Activating that site that exists in a flood plane but at a really important part of our city will have benefits for our entire community. Having been in the hotel business [with 21C Museum Hotel] and having developed hotels, what amenities or attractions would you like to see be a part of the planned convention center hotel site? I think the quality and the size are incredibly important. I also think connecting it to our city is important, whether it is ultimately connected to our bourbon industry or other authentically Louisville industries and will be incredibly helpful for its ultimate success. I want to encourage its design to provide strong connections to Main Street as well as our skyline.
