Construction has started on a $52 million office tower that will rise 15 stories above ground at West Sixth and Bowie streets in downtown Austin, just east of Whole Foods Market’s corporate headquarters.
Austin-based tech firm Cirrus Logic, which has 650 Austin employees, will be a tenant in the building. Cirrus Logic will occupy four floors, or about 80,000 square feet of space.
The building, named Shoal Creek Walk, is expected to open in the summer of 2017, according to developer Schlosser Development Corp., adding 225,000 square feet of space to downtown’s thriving office market.
The tower will have 18 stories in all — 10 floors of office space, one floor of retail space, four levels of above-ground parking and three levels of underground parking, said Rick Duggan, a partner with Schlosser Development Corp.
Cirrus plans to relocate employees from another downtown location, the 300 West 6th building, where it occupies 60,000 square feet. The additional 20,000 square feet in Shoal Creek Walk will allow Cirrus room for future expansion, which could include growth in its headcount and additional laboratory space, company spokesman Bill Schnell said, although he said he could not project future headcount growth.
“It’s flexible space to accommodate the future needs of the business,” Schnell said.
Shoal Creek Walk will be across the street from Cirrus’ existing headquarters at 800 W. Sixth St., where the company occupies 150,000 square feet of space.
“The new space at Shoal Creek Walk will allow having our all of our Austin employees in closer proximity to one another, compared to the distance between our headquarters building and the current space at 300 West 6th Street today,” Schnell said. “It’s also great that it’s so close to Shoal Creek, to which Cirrus Logic has been a major contributor to long-term sustainable improvement programs along the creek.”
The timing of Schlosser’s building comes as downtown Austin is experiencing a strong office leasing climate.
More than 800,000 square feet of new office space either has been completed, or will wrap up this year in downtown, said Ryan Kasten, senior vice president with Cushman & Wakefield | Oxford Commercial in Austin.
“Even with that volume, gross rent rates for (first-class) office space are at an all-time historic high of $47.80 (per foot). We anticipate new projects and new leases to continue, as tenant demand remains consistent and strong,” Kasten said.
Kasten said technology companies have transformed the landscape for demand for downtown office space, and “have proven to have a healthy appetite on a very consistent basis, which advances downtown’s diversification – creating a domino effect of advantages for our city.”
Duggan said Schlosser Development is in preliminary discussions with several other prospective tenants of varying sizes interested in Shoal Creek Walk. “Now that construction has commenced, we expect interest to increase,” Duggan said.
At one point, Whole Foods Market was part of an earlier iteration of Schlosser’s office project proposed for the site, when two buildings were being considered, but a deal never materialized.
Last year, Whole Foods unveiled a new plan for its corporate expansion that encompasses multiple properties on several nearby sites, including two buildings it purchased across North Lamar Boulevard from its 10-year-old flagship store and headquarters.
Whole Foods continues to have a lease on about two-thirds of the block where Shoal Creek Walk will rise, where the organic grocer could eventually build another building to accommodate its growth.