Report: Downtown Austin on the precipice of a 'major transformation'

AUSTIN (KXAN) -- The 600 acres encompassing downtown Austin are not just seeing a post-pandemic new normal. Instead, in a new report leaders describe a significant overhaul in the way the space is used, leading to what they call a "major transformation."

While the days of large skyscrapers filled with a single major employer are waning, more and more developments are filling with smaller tenants from a diverse variety of industries.

"What we're seeing is that merging in downtown after the pandemic, or during this current period, is just the growth and entertainment sector," said Jenell Moffett, chief impact officer of the Downtown Austin Alliance. "Growth in restaurants, growth in pedestrian activity, nights and weekends."

After 17 new major buildings were added in 2022, another 22 projects are under construction now, with an additional 34 planned.

The growth is happening outside of the office as well. Roughly 3,000 additional hotel rooms are planned in the coming years, as well as 11,200 residential units.

"All product types are being planned in terms of office, retail, tourism. Even park space is being planned for downtown," Moffett said. "We're also seeing a lot of new industries come into play. So things like arts and culture are returning back into downtown, and live music is taking a firm comeback into downtown."

Despite these areas of growth, employment lags behind. The latest numbers shared by the Downtown Austin Alliance show that in-office activity in the area is just 60% of pre-pandemic levels.

Vacancy rates sit at around 15%, triple what the rate was in 2017. Meantime, downtown Austin sees around 2.6 million visits each month, down from more than four million in 2019.

With more than 680 storefront businesses, the report also routes downtown's diversity of industries, people, and ideas.

"When downtown has the benefit of pulling on those multiple industries, you're able to see small businesses thrive. You're able to see major concerts and major artists come to light," Moffett said. "People are just working together to make sure that downtown stays vibrant, and it's solving for many of the challenges that were highlighted during the pandemic."