Austin badly needs more downtown office space. Austin's downtown Class A rents are higher than either Dallas or Houston's, which is absurd. But it is difficult for developers to line up money to build an office building on spec, particularly without a large anchor tenant to soak up a few floors. Austin doesn't have many firms looking for large blocks of downtown space.
Cousins Properties will try, though. It has announced plans for a 30-story office tower at Third and Colorado streets. The tower would have about 390,000 square feet of office space and 6,000 square feet of street-level retail. Twelve of the 30 stories would be for a parking garage with 900 spaces. It would be downtown Austin's first new high-rise office building since Frost Bank Tower opened eight years ago.
Downtown zoning regulations limit the building to a floor-to-area ratio ("FAR") of 8:1. The owner got approval in 2009 for a FAR of 12:1, but the zoning ordinance restricted the increase to a hotel use, and the developer needs 15:1 FAR anyway. Althought it's ridiculuous that central business district zoning limits this downtown site to around eight floors of office space (parking doesn't count against FAR), that's not the real constraint on this building's size. The developer is asking for 15:1 and I expect it will get it.
I suspect the real constraint here is parking. Drivers will only drive up so many ramps in order to park their cars. The taller the garage, the bigger the pain it is to park on the top floors. This puts a practical cap on the number of floors a parking garage can contain. The developer is proposing a 12-story garage, which is an aggressive estimate of that cap. It's safe to say that this plan would maximize the amount of parking on site.
Despite all that parking, the plan is proposing "only" 2.3 parkings spots per 1,000 sf of office space -- less than that, really, since some of that parking should be allocated to the ground-floor uses. Although this is more parking than the city requires, it is less than conventional wisdom says new office buildings in downtown Austin need, which I've been told is around 3 spaces per 1,000 square feet.
I'm not questioning the feasibility of this plan. As office rents rise, the opportunity cost of a parking spot increases, which should lead to less parking per square foot of office space. And I'd be delighted to see the ratio of parking to office space decline in downtown Austin. But the extreme height of the garage combined with the aggressive parking-to-office-space ratio suggests that the developer has proposed 17 floors of office space because it can't fit in enough parking for 18 floors. Put differently, the developer is building as much leasable space as its maxed-out parking garage will support.