AUSTIN, Texas (Sept. 6, 2022) – Development partners Lincoln Property Company (LPC) and Kairoi Residential have broken ground on a 74-story mixed-use high-rise called Waterline in downtown Austin that will become the tallest tower in Texas when it opens in late 2026. The Public Sector Pension Investment Board (“PSP Investments”), one of Canada’s largest pension investment managers, is the main equity partner in this major development project.
Located at 98 Red River St., Waterline will extend 1,022 feet above a lush 3.3-acre campus near the intersection of Waller Creek and Lady Bird Lake.
Targeting LEED Gold certification throughout the building, the project will include 352 luxury apartment homes; 700,000 square feet of office space; and the 251-room 1 Hotel Austin — the first Texas location for the global hospitality company SH Hotel Resorts’ sustainability-focused 1 Hotels brand.
Reaching new heights
Waterline is the third downtown Austin high-rise that LPC has co-developed and broken ground on in the last three years. Sixth and Guadalupe, also co-developed with Kairoi Residential, will open next year with 66 floors of residences, offices, and ground-level retail. The Republic, a 48-story office tower adjacent to Republic Square Park, is scheduled to open in late 2024. When completed, all three buildings will be taller than any high-rise on the ground in Austin today.
“Downtown Austin offers one of the most dynamic markets and skylines in the nation, and we’re excited to help drive its ongoing transformation,” said Seth Johnston, Senior Vice President of LPC in Austin. “Waterline marks a new milestone for downtown not only because of its height but also because of the positive impact this project will have on improving connectivity, enhancing public amenities, and attracting more people to this beautiful area of downtown.”
Situated on the eastern bank of Waller Creek along the Waterloo Greenway, Waterline will serve as a new gateway from the Central Business District to the Rainey Street district. The development will add two new pedestrian bridges over the creek from the west, as well as three additional public pedestrian and bike access points to the Waterloo Greenway from the east.
The development team will contribute $1 million to the Waterloo Greenway Project to help fund improvements to the 1.5-mile urban trail that connects the University of Texas at Austin to Lady Bird Lake.
On the trail of exceptional urban living
Designed by Kohn Pedersen Fox — a global architecture firm with a portfolio that includes the 55 Hudson Yards and One Vanderbilt towers in New York City — Waterline will feature floor-to-ceiling windows, warm textures, and native stone.
“Waterline will offer a truly unique experience with unrivaled views, world-class amenities and a thoughtful design that connects the building’s interior with the project’s unique natural surroundings throughout the building,” said Michael Lynd Jr., CEO of Kairoi Residential. “We’re thrilled to introduce Austin’s next iconic project.”
The building’s vibrant ground floor will feature 24,000 square feet of publicly accessible retail and restaurant space overlooking Waller Creek and the Waterloo Greenway, separated by a floodplain forest to protect the natural experience for trail users.
1 Hotel Austin will occupy the next 13 floors with a ballroom and meeting spaces on the 14th floor and a rooftop pool with food and beverage service on the 16th floor.
The office portion of the tower will occupy 27 stories with a 14th-floor amenity deck featuring 24,000 square feet of landscaped outdoor space along with a bar and lounge, indoor meeting spaces and a prep kitchen for special events. Office tenants also will have access to a 7,000-square foot fitness center on the second floor featuring cardio equipment and weights along with a yoga and dance studio.
Upscale residential homes will fill the building’s top 33 stories offering residents access to two pools on the 41st floor along with a lounge, bar, kitchen, and co-working space. A movement studio, workout studio and steam room will be located one floor above along with soaking tubs, hammocks, a BBQ pit, and a communal dining area.
“We are pleased to be increasing our portfolio exposure to high conviction markets and green assets in one of the fastest growing cities in the United States,” said Carole Guérin, Managing Director, Head of Americas, Real Estate Investments, PSP Investments. “This investment provides significant upside potential as the city of Austin continues its expansion to become a top-tier US market that offers high quality of life, a supportive business environment, exciting employment opportunities and a hotbed for technology and innovation.”
Blackstone Mortgage Trust, Inc. (“BXMT”) provided the construction loan for the project.
“We continue to see strong demand for new, best-in-class residential, office and hospitality assets in high growth markets like Austin and are excited to support this trophy, mixed use development that will make a meaningful contribution to the community as well as the Austin skyline,” said Katie Keenan, Chief Executive Officer of BXMT. “We look forward to continuing to lend on low-leverage, high-quality projects and serving as a partner to well-capitalized, experienced sponsors like LPC, Kairoi, and PSP Investments.”
Eastdil Secured served as the financing advisor to the sponsors.
ABOUT LINCOLN PROPERTY COMPANY
Lincoln Property Company (LPC), founded in 1965 by its chairman Mack Pogue, is a privately-owned real estate firm involved in real estate investment, development, property management and leasing worldwide. Lincoln’s international reputation for successful management of their own properties quickly attracted a large client base of owners and investors who recognized the value that LPC could provide in development, property management, brokerage, investing, advisory, construction management, engineering and all real estate consulting services. LPC has developed over 148 million square feet of commercial space with an additional 8 million square feet currently under development. Today, LPC is one of the most respected and diversified service firms in the United States, serving a growing client base that reaches coast-to-coast, as well as into Mexico and Europe.
ABOUT KAIROI RESIDENTIAL
Kairoi Residential is a premier, vertically integrated, multifamily investment, development, and property management company headquartered in San Antonio with offices in Austin and Denver. Since 2003, the partnership has transacted on $7.7 billion across 65,000 multifamily units in many cities and states around the country.
ABOUT BLACKSTONE MORTGAGE TRUST
Blackstone Mortgage Trust (NYSE:BXMT) is a real estate finance company that originates senior loans collateralized by commercial real estate in North America, Europe, and Australia. Our investment objective is to preserve and protect shareholder capital while producing attractive risk-adjusted returns primarily through dividends generated from current income from our loan portfolio. Our portfolio is composed primarily of loans secured by high-quality, institutional assets in major markets, sponsored by experienced, well-capitalized real estate investment owners and operators. These senior loans are capitalized by accessing a variety of financing options, depending on our view of the most prudent strategy available for each of our investments. We are externally managed by BXMT Advisors L.L.C., a subsidiary of Blackstone. Further information is available at www.bxmt.com.
ABOUT PSP INVESTMENTS
The Public Sector Pension Investment Board (PSP Investments) is one of Canada’s largest pension investment managers with C$230.5 billion of net assets under management as of March 31, 2022. It manages a diversified global portfolio composed of investments in public financial markets, private equity, real estate, infrastructure, natural resources and credit investments. Established in 1999, PSP Investments manages and invests transferred to it by the Government of Canada for the pension plans of the federal Public Service, the Canadian Forces, the Royal Canadian Mounted Police and the Reserve Force. Headquartered in Ottawa, PSP Investments has its principal business office in Montréal and offices in New York, London and Hong Kong. For more information, visit investpsp.com or follow us on Twitter and LinkedIn.