A developer who scaled back plans for the tallest tower in Texas has put the project on indefinite hold.
Local firm Wilson Capital has delayed construction on its Wilson Tower and two other multifamily high-rises, citing market headwinds that have made the firm’s urban development plays financially unworkable, the Austin Business Journal reported.
The Wilson Tower was pitched in 2022 as an 80-story skyscraper slated to begin construction in 2023; it was later scaled back to 45 stories. The site at 410 East Fifth Street was formerly home to Avenue Lofts and has already been cleared. But Wilson Capital President Taylor Wilson said the numbers no longer pencil.
“Something’s got to give,” he said, pointing to elevated interest rates, sticky construction costs and an oversupplied apartment market.
The apartment market has shifted drastically from pandemic-era highs. Vacancy in the metro stood at 15.2 percent at the end of last year, according to CoStar data. Even a modest improvement would meaningfully shift the math for downtown residential development, Wilson said.
Average rental rates plummeted 12.5 percent from a two-year high of $1,640 in mid-2023 to $1,435, as of February. Austin has added 36,000 apartments over the past year but only 19,000 units were absorbed.
The developer also hit pause on its 30-story tower at 2500 Braker Lane near Q2 Stadium, as well as Concordia, an 11-story, 256-unit building planned for 1010 Concordia Avenue. All three projects have active permits, and Wilson said his firm will be ready to go when financial conditions improve.
For now, the firm is focusing on suburban projects and land development, where the economics are more favorable.
Downtown demand hasn’t gone anywhere, Wilson said. The challenge lies in getting lenders and investors back on board with high-rise development.
— Judah Duke
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