Austin | Conrad Residences (307 E. 2nd St.) | 755 Feet | 62 Floors | Never Built

[migol24]

Downtown last night, and particularly, Rainey street was dead. It felt like what a typical Thursday would normally feel like and Thursday felt like what a typical Tuesday or Wednesday would feel like. I don't know if any of you have been out lately but things have slowed down a lot. You can say it's the weather but I don't think so. In my industry, we've noticed how much downtown has slowed down significantly since southby. I don't know if any of this is related but something feels off.

[Urbannizer]

People are feeling discouraged to venture down Rainey because of all the construction.

Also a friend who works in the restaurant industry mentioned Sunmer months tend to be slower- (students gone, people still working from home/going on vacation and the heat).

[migol24]

Originally Posted by Urbannizer

People are feeling discouraged to venture down Rainey because of all the construction.

Also a friend who works in the restaurant industry mentioned Sunmer months tend to be slower- (students gone, people still working from home/going on vacation and the heat).

Yeah they do tend to be slower. But not by this much. The only slower times I remember seeing it is during the 2020 lock down and the recession of 08-09. But this hasn't been a typical year. We've felt it significantly in our industry.

[ILUVSAT]

"Inflation" is, I believe, a big driver in whether or not to "go out." It's simply just too expensive these days. People used to be able to go out multiple times a week. Now, they have to be more cautious about their disposable income and where it goes.

In addition to current costs - people are realizing things may not be getting better anytime soon.

On May 24, 2023, Forbes Magazine stated the following:

"Rising interest rates, high inflation, an inverted yield curve and an unexpected banking crisis have all been cited as reasons that a recession could be imminent. The New York Fed recession probability indicator suggests there is a 68.2% chance of a U.S. recession sometime in the next 12 months."

We're in for a bumpy ride folks.

[ATX2030]

This project more than likely is a casualty of the work from home phenomena which killed a large portion of business travel.

Q3 has been pretty much the consensus of when the recession will be officially recognized.

[Riverranchdrone]

Originally Posted by ATX2030

This project more than likely is a casualty of the work from home phenomena which killed a large portion of business travel.

Q3 has been pretty much the consensus of when the recession will be officially recognized.

What recession? Job market is still beating expectations. Inflation has been cut in half over the past year. Stocks have been stable. Gdp% is still high. Recession and the old inflation rate are well outdated scare tactics that keep on getting proven wrong.

[ATX2030]

Originally Posted by Riverranchdrone

What recession? Job market is still beating expectations. Inflation has been cut in half over the past year. Stocks have been stable. Gdp% is still high. Recession and the old inflation rate are well outdated scare tactics that keep on getting proven wrong.

I like your outlook much better than the other fin prognosticators

[We vs us]

Originally Posted by ATX2030

This project more than likely is a casualty of the work from home phenomena which killed a large portion of business travel.

Q3 has been pretty much the consensus of when the recession will be officially recognized.

Just throwing this out there. Business travel is actually on a long slow upswing, and has improved by head and shoulders since the pandemic. Similarly, demand for luxury hotel rooms is still at an all time high. The Conrad portion of this tower was always going to do well, IMO.. especially being next door to a soon to be rebuilt convention center.

I guess I would be very surprised if it’s the hotel portion that ends up sinking this project. I’d be more inclined to blame high interest rates, raw material and labor costs, changing lending environment, etc. at least until we hear more.

[valhalla]

From a pure design standpoint, I'm happy to see this one bite the dust. I actually wouldn't mind a cooldown in development to let the architects move on to new fads/design schemes that will break up the monotony in this construction cycle. As much as I love the breakneck pace of development we're running out of lots as it is. I'm not sure I can handle another copy pasta tower with random cantalevers/ open space amenity decks with crooked support beams/ poorly integrated parking podium etc.

[Maximusx1]

Uh, if I were a new convention center related hotel, I would delay my construction/opening to coincide with the construction/re-opening of the convention center.
Not sure why that's rocket science here...

[Jdawgboy]

Originally Posted by Maximusx1

Uh, if I were a new convention center related hotel, I would delay my construction/opening to coincide with the construction/re-opening of the convention center.
Not sure why that's rocket science here...

^^^ I was thinking the exact same thing since the site is right there. Considering the convention center timeline and the massive transformative potential, it's quite likely that they want to tie it all together at the same time. Makes sense to me.

[paul78701]

Based on the announcements related to the convention center, I would not be surprised if they decided to remove the residential portion from this and make it a larger hotel project.

[FrankLloydLeft]

Originally Posted by paul78701

Based on the announcements related to the convention center, I would not be surprised if they decided to remove the residential portion from this and make it a larger hotel project.

Hell, with the CC moving forward again, maybe it's back to the drawing board to add more rooms and condos. Bumping the height up.

[The ATX]

Financing has become expensive and much more difficult to obtain. We're in for a pause to the boom for a couple years - several years for office projects.

[bobbywest87]

Which of the currently proposed towers can we even realistically expect to go through? It seemed like there was a lot of talk around 62 East Ave at one point recently, and 506 West Residential just released those new renders.

Perennial, Block 16, and Conrad all appear to be casualties of the market, unfortunately.

[The ATX]

Originally Posted by bobbywest87

Which of the currently proposed towers can we even realistically expect to go through? It seemed like there was a lot of talk around 62 East Ave at one point recently, and 506 West Residential just released those new renders.

Perennial, Block 16, and Conrad all appear to be casualties of the market, unfortunately.

We may not see any significant downtown groundbreakings this year. I know the Paseo officially broke ground in February, but it actually got underway in December. Very few projects are seeing any activity on their site plan applications. Three projects making steady progress towards site plan approval are 14th & Lavaca, 62 East & 506 West. The latter two also need City Council approval for zoning changes.

[loonytoony]

From what I've gathered the Conrad brand is no longer a part of this development. There is still a tower coming - however details are sparse on scope and timeline. I think this is one we'll need to be patient on for the time being.

[We vs us]

Originally Posted by loonytoony

From what I've gathered the Conrad brand is no longer a part of this development. There is still a tower coming - however details are sparse on scope and timeline. I think this is one we'll need to be patient on for the time being.

Well that’s depressing. Would’ve been a stellar fit there.

Any sense about whether a hotel is still part of the general plan?

[GoldenBoot]

Dang. So we lost the Conrad and Ritz. Ugh!

[Geckos_Rule]

Originally Posted by GoldenBoot

Dang. So we lost the Conrad and Ritz. Ugh!

I mean one or both may be in the mix down the road. Particularly for the Ritz, I always thought it was a bit of a pipe dream at the time, given that there's no way anything new could start construction there until the Travis is completed, and likely Waterline as well.

Assuming something is absolutely going in that spot, I'd expect it to be constructed alongside Phase 2 of Waterline, with a start date closer to 2026-2027. For nearly any hotel brand, it'd be tough to sign on now just to sit and wait for 5 years.