In the first new office tower to break ground in downtown Austin in more than a decade, construction started Wednesday on the 13-story IBC Bank Plaza, the bank’s president told the AmericanStatesman exclusively.
The tower at 500 West Fifth St. will house the local headquarters for IBC Bank - Austin and other tenants. It is scheduled to open in spring 2014, bringing about 195,000 square feet of new space to the downtown market, where occupancies and rents have been on the rise amid healthy ongoing demand.
“It’s been a long drought for the central business district, and hopefully this will initiate further development in downtown, said Bob Barnes, president and CEO of IBC Bank-Austin. IBC will be the owner and lead tenant in the building, occupying about 27,000 square feet. IBC Austin currently occupies about 15,000 square feet in the 816 Congress tower, and will make the move to its new headquarters in late 2014, Barnes said.
“With the rapid growth of the downtown area, we believe IBC Bank Plaza will be an important addition to the city, providing office and retail space in one of the most coveted areas of town,” Barnes said.
Austin-based Endeavor Real Estate Group is developing the project. It will include retail space, a parking garage and balconies overlooking Republic Park, with Capitol views from upper floors. Jamil Alam, a managing principal with Endeavor, said the building will be distinguished by a curve fronting West Fifth as well as its prime location.
“IBC Bank Plaza’s proximity to the Federal Courthouse, City Hall, Whole Foods, the Warehouse District, Congress Avenue, and Lady Bird Lake means occupants will be within a 5-block walk of just about anything they could ever need in downtown,” Alam said.
Another major office development also is being planned for downtown. The developer, Atlanta-based Cousins Property Group, is seeking a zoning change to allow it to build a 28-story tower with 371,000 square feet of space at Third and Colorado streets.
In addition, Stream Realty Partners plans to add 112,000 square feet of space downtown when it remodels a vacant annex building at 501 Congress Avenue, next to the existing Bank of America tower. The five-story building is expected to be ready in June 2014.
Cousins’ project would be its second office tower downtown. Cousins developed Frost Bank Tower at Fourth Street and Congress Avenue, which broke ground in October 2001, completed construction in late 2003 and had its grand opening in early 2004.
Tim Hendricks, senior vice president with Cousins in Austin, said the downtown office market continues to be strong, with more than 170,000 square feet of net space absorbed last year.
“We’ve been pleased with our pre-leasing to date,” Hendricks said, although he declined to provide an updated timetable for breaking ground for the project at Third and Colorado. When he announced the project in 2012, Hendricks said he expected to start construction late that year.
Hendricks points out that the January 2002 debut of the 23-story tower called 300 West Sixth and Frost Bank Tower’s arrival added more than 1 million square feet of office space, increasing downtown’s office market at the time by 20 percent.
Even despite 300 West Sixth opening, and Frost breaking ground, during the tough economic times brought on by the tech downturn, “both buildings were substantially leased within four years after delivering,” Hendricks said.
Hendricks said he believes Cousins’ and IBC’s buildings will lease up “without dramatically affecting the current market occupancy.”
Will Douglas, a vice president in Austin with CBRE, a commercial real estate services firm, said he has clients interested in both Endeavor’s and Cousins’ buildings.
“There’s no question that IBC and Cousins will both succeed,” Douglas said. “Both are dealmakers. Personally Hendricks and the Endeavor guys, they make it easy to get a deal done.”