Now that Stephen Ross’ Miami Dolphins face long odds to win the Super Bowl — having lost to the godforsaken New York Jets — the billionaire developer appears to have a different title in mind: King of South Congress.
In late September, Ross’ Related Companies shelled out $65 million for 500 South Congress Avenue, a six-acre site just south of Lady Bird Lake. Earlier that month, the firm announced two office projects in the neighborhood: A 490,000-square-foot development at One Lady Bird Lake and a 107,000-square-foot office at 901 South Congress Avenue.
All three sites sit a stone’s throw from the Equinox gym at 1007 South Congress, an outpost of the upscale fitness chain owned by Related executives. That property is worth an appraised $1.95 million and traces to Equinox’s New York headquarters.
The firm’s spread amounts to something of a Related company town growing on South Congress. The projects form a home base for Related’s growing Texas portfolio as the firm — whose estimated $60 billion of holdings includes luxury condos, office buildings and rental apartments in New York, Florida and California — expands into the Lone Star State.
Some of Related’s plans are clear. One Lady Bird Lake, the larger of the firm’s two planned office buildings, will break ground in 2023 and wrap up construction by 2025. Renderings show it will feature all the trappings of Related’s Class-A office spaces in New York and Los Angeles, like floor-to-ceiling glass walls, wraparound balconies and ample green space. Related aims to start building the smaller office building next year and finish it by 2024. It will be built out of mass timber, an eco-friendly material gaining popularity across the country.
Austin leads the nation in office occupancy, according to card swipe data from security firm Kastle. While sublease availability rose in the third quarter, high-end new construction like Kilroy Realty’s Indeed Tower have continued to hoover up leases in the post-pandemic environment. All told, there’s still demand for quality office space in Austin.
“You’ve got a market that really isn’t overbuilt,” said Travis Rogers of Stream Realty. In particular, the area south of Lady Bird Lake has become one of the most popular areas for new development to fill that appetite. Stream recently finished RiverSouth, a 15-story, glass-walled office building on South First Street. Nearby, Endeavor Real Estate plans a six-tower redevelopment of the former Austin American-Statesman HQ on the river.
“South of the river has never really had office buildings of scale,” Rogers said.
With few thoroughfares across Lady Bird Lake, neighborhoods south of the water have become increasingly popular for companies whose employees live in wealthier South Austin enclaves like Barton Creek. Despite Austin’s relatively high return-to-office numbers, the office vacancy rate still sits at 21 percent, according to JLL’s third quarter report. Offering employees the opportunity to skip traffic into downtown by staying south of the river might be a valuable new amenity.
Related’s plans for 500 South Congress aren’t yet clear, but the purchase price of nearly $11 million an acre suggests it expects to pull serious returns. Elsewhere in Texas, Related has pounced on skyrocketing multifamily rents, acquiring the 520-unit Arium Creekside Apartments in Dallas. While the firm’s recent moves suggest a renewed push in Texas, they aren’t the firm’s first rodeo: In 2014, Related bought 21 apartment buildings totaling some 3,000 units in Midland and Odessa.
Nonetheless, Related’s Texas property roundup is a relatively new endeavor. The firm still hasn’t even added Texas to its website’s list of locations, which includes everything from New York and Florida to smaller markets like Irvine and Santa Clara.
Related is also hiring in Texas, with 30 job openings in the Lone Star State posted on its site, including for a vice president of operations to be based in Dallas. But Mike Iannacone, an executive vice president at the firm, has emerged as Related’s man in Texas. He told the Austin Business Journal that he has moved to Austin.
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Iannacone previously worked for Related in New York, where, among other things, he led the firm’s redevelopment of One Madison, a 60-story condo building at 23 East 22nd. That project, a partnership with HFZ Capital Group, bet on luxury in the midst of New York’s condo boom, targeting a $50 million price tag for its triplex penthouse (the apartment ultimately sold for $43 million, property records show.
A spokesperson for Related failed to make Iannacone available for an interview despite repeated requests to discuss the firm’s plans for Texas.