Downtown 7 in 7 | July Econ Dev Update

Downtown Austin continues to show encouraging signs of momentum, with new investment, steady development activity and positive market indicators pointing toward a strong urban core. From notable property transactions to upcoming opportunities for the commercial real estate community, here’s what you need to know this month:

1. Quarterly Market Outlook

The past quarter has brought renewed momentum to the Downtown Austin capital markets, with several notable property sales signaling continued investor confidence in the district. Most notably, Houston-based Hines acquired 405 Colorado for $151 million in early July, citing its belief that the U.S. office market recovery is underway.

We also saw increased investment activity from Brick Row, which purchased 823 Congress Avenue with plans to rehabilitate both the building’s exterior and interior. The redevelopment will focus on creating high-quality space tailored to small and medium-sized businesses, adding another positive signal for downtown’s office market.

While the commercial real estate market remains in the early stages of recovery, these investments—combined with the first meaningful decline in downtown office vacancy in several years—suggest that market conditions are beginning to improve. Although challenges remain, these indicators provide reason for optimism that Downtown Austin is turning a corner and moving toward a healthier, more balanced office market.

We will continue to monitor market trends, development activity and economic conditions across downtown and share updates as they emerge. If you have questions about the market or would like to discuss a specific opportunity, we’d welcome the opportunity to connect.

2. Downtown Q2 Market Snapshot

132,000 Downtown Employees
13,500 Residents
163,200 Daily Average Foot Traffic
6 Projects Under Construction
21 Planned & Proposed
79.3% Overall Office Occupancy Rate
89.1% Overall Multifamily Occupancy Rate
$260.50 Average Hotel Daily Rate

3. Business & Investment News

• June 2026 saw 15 development permits filed with a total of 102,203 SF at a combined listed cost of $10,608,803.
• Hilton Garden Inn was acquired by JMI Realty, and plans a comprehensive renovation of the property.
• Texas Capital Bank signed a deal for space at 415 Colorado St. The more than 27,000-square-foot lease is the largest signed in the office portion of the mixed-use downtown project, which wrapped up construction last year and sits below several hundred apartments.
• KBS has listed 515 Congress for sale, an office building at 6th and Congress and constructed in 1975 that is nearly entirely leased.
• Apollo Global Management wants to locate its second headquarters to Austin. While details on their space requirements are unknown, downtown is considered a front-runner for housing their new location.
• Taqueria De Diez has kicked off their interior work of their new space at 500 E 6th St.
• JW Marriott has completed a property-wide refresh that replaces its former palette of Texas-inspired golds and browns with cool blues, flowing forms and updated finishes inspired by the river.
• Coworking operator The Malin has subleased an entire floor at Sixth and Guadalupe. The Malin differentiates itself from other coworking spaces with interior designs that more resemble upscale hotel lobbies and social clubs than cubicle-filled offices.
• Emo’s is Coming Back Downtown.

4. Save the date: Downtown Commercial Broker Roundtable & Lunch, August 27, 2026

Join us for the next Downtown Commercial Broker Roundtable and gain valuable insights into the trends, projects, and opportunities shaping the downtown market. Attendees will have the opportunity to meet the Downtown Strategy Officer and learn about key initiatives driving downtown growth and investment. We’ll also share the latest economic development updates, review current market data and trends, and hear important organizational updates from our CEO. Don’t miss this chance to connect with fellow brokers, stay informed on the region’s evolving landscape, and discover what’s ahead for the commercial real estate community. Email us to get on the invite list.

5. Value of Downtown Austin study reinforces that Downtown Austin is still the Economic Engine of our City

Downtown represents a highly concentrated value base, accounting for more than 11% of the City’s taxable value and approximately 6% of Travis County’s value on 0.5% of the City’s total land area. This concentration has intensified over the past decade, with taxable value increasing by approximately 300% since 2015. As a result, Downtown Austin generated approximately $121 million in property tax revenue in 2025, contributing to the City’s property tax revenue, which overall accounts for roughly one fifth of total City funds.

At the same time, downtown functions as the region’s highest-density employment center, with over 75,000 private sector jobs concentrated in a compact geography and strong growth since 2015. Private sector employment is led by professional, scientific, and technical services, alongside finance, real estate and administrative sectors, reflecting a shift toward a knowledge-based, office-oriented economy with high-paying jobs. These trends reinforce downtown’s role as the core driver of economic activity, while also highlighting emerging risks tied to remote work and technological changes driven by AI.

Read the full report.

6. DASA is awarded Austin Community Foundation Grant

We’re proud to share that our Downtown Austin Space Activation (DASA) program has been awarded a grant from the Austin Community Foundation in recognition of its impact on economic mobility, small business growth and entrepreneurship. This investment will help expand DASA’s efforts to create opportunities for entrepreneurs and local businesses by activating downtown spaces, lowering barriers to entry and fostering a more vibrant and inclusive business ecosystem. We’re grateful for Austin Community Foundation’s support and excited to continue empowering small businesses and entrepreneurs as they contribute to the economic vitality of Downtown Austin. Learn more here.

7. What We’re Watching

• Austin Convention Center Redevelopment
• Project Connect and downtown station planning
• I-35 Capital Express Central and the Cap-and-Stitch initiative
• Congress Avenue and East Sixth Street revitalization efforts
• Economic Development tools and incentives at Dog’s Head
• City of Austin budget