UPDATED July 27 11:27am
Austin’s office market has lost some gleam in recent months, but a new project will add another shiny tower to the Domain.
Northwood Office plans to build a $155 million tower and parking garage at 3000 Palm Way. The building will rise 23 stories and span roughly 400,000 square feet, according to a filing with the Texas Department of Licensing and Regulation.
Boka Powell is the project’s architect of record. The firm already worked on three office towers in the Domain, including Domain Tower I, which houses offices for Indeed.
Northwood’s portfolio includes just over 9 million square feet of office space, according to its website. Its properties are in metros across the Sun Belt, including Nashville, Atlanta, Miami and Charlotte, as well as some coastal stalwarts like Boston and Seattle.
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The North Carolina-based firm worked on the Domain Northside, a 600,000-square-foot retail project in the growing north Austin neighborhood. Elsewhere in Texas, it has invested in two retail centers near Dallas. This office highrise marks one of the firm’s first ground-up office projects in Austin.
The capital city’s office market has been shaken by a series of high-profile subleases from major tenants including Meta and TikTok. A downturn in the technology sector has led many of Austin’s biggest firms, also some of its biggest office tenants, to consolidate their office footprints. Most notably, Meta dumped nearly 700,000 square feet of space back onto the market.
The city’s office vacancy rate of 21.3 percent is its highest since at least 2011, according to a report from CBRE. This isn’t Northwood’s first time bucking a trend: in the teeth of the pandemic, the firm’s investment arm paid $325 million for a pair of mixed-use buildings in the Soho neighborhood of Manhattan.
UPDATE: The project square footage and timeline have been updated based on information provided by Northwind after publication.