Planned development of 74 floors in the city center to obtain a luxury hotel

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A 74-story tower planned for the Rainey neighborhood of downtown Austin has landed a luxury hotel brand for the project.

1 Hotels, which markets itself as a luxury brand focused on sustainability, will join the mixed-use development at 98 Red River St. along Waller Creek. Plans for the project call for 352 apartments, 686,000 square feet of office space and a 251-room hotel.

The tower – which will be Austin’s tallest building if completed as planned – has not been officially named, and 1 Hotels has not said when the location is expected to open. Augustine Verrengia, civil market leader at WGI, the project’s civil engineering firm, said earlier this year that 98 Red River will be over 1,000 feet.

1 Hotel Austin will include a pool on the 16th floor of the tower and offer sweeping views of Austin and the Waller Creek Greenway below, the company said.

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“When we open our doors, our guests will immerse themselves in the energetic attractions of Austin’s creative community while simultaneously serving a restorative relationship with the natural beauty of the Hill Country,” said 1 Hotels Founder and CEO Barry. Sternlicht, in a written statement.

The Rainey Street property marks 1 Hotels’ entry into the Texas market. The company has hotels in New York, West Hollywood, South Beach, Toronto, San Francisco and China.

Lincoln Property and Kairoi Residential are developing the 98 Red River skyscraper, which when completed could become the tallest building in Texas. The current tallest skyscraper in the state is the 75-story, 1,002-foot JPMorgan Chase Tower (formerly the Texas Commerce Tower) in downtown Houston.

In Austin, 98 Red River is expected to be taller than another skyscraper currently under construction — a 66-story, 875-foot-tall mixed-use tower named Sixth and Guadalupe after its downtown location. Sixth and Guadalupe is also being developed by Lincoln Property and Kairoi Residential.

Currently, Austin’s tallest completed building is the 58-story Independent — nicknamed the “Jenga Tower” for its quirky design — which stands 690 feet tall.

1 Hotels is operated by SH Hotels & Resorts, which is a subsidiary of global private investment firm Starwood Capital Group. 1 Hotels was launched in 2015 and currently has projects in development in cities including Nashville, Cabo San Lucas, Paris, London, Copenhagen and Melbourne.

Austin market rebounds

1 Hotels’ announcement comes as Austin’s hotel market continues to rebound from the economic hit from the COVID-19 pandemic. Paul Vaughn, senior vice president of Source Strategies, a San Antonio-based consulting firm that tracks the lodging industry, said the Austin market is “on the right track, but will always recover. ground lost over the next year or so.”

Austin’s downtown hotel market, with its concentration of more expensive hotels, has been hit hard during the pandemic and has been one of the slowest to recover in the Austin metro area, Vaughn said. .

Across the Five Counties of Austin-Round Rock, overall hotel revenue in the first quarter more than doubled from the prior year quarter and even exceeded revenue first-quarter 2019 growth of almost 11%, he said.

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“This is great news and indicates a positive overall recovery trajectory, but some sectors of the market are coming back faster than others,” he said.

Pleasure and personal travel returned faster than business and group travel, he said. Luxury and upscale hotels that cater to high-end business travelers have been even slower to recover.

Dewitt Peart, president and CEO of the Downtown Austin Alliance, said downtown has five hotels under construction and five more planned.

“In the next two years, we’ll have 10 new hotels that will add about 1,000 rooms to the downtown hotel supply,” Peart told the American-Statesman recently.

As the hospitality industry emerges from the COVID crisis, Austin is being targeted by a number of luxury brands looking to enter the market.

When it comes to new hotel openings in 2022, Austin is second only to New York, according to a report by Lodging Econometrics.

Among the top 50 markets in the United States, New York is expected to have 77 hotels with 10,934 rooms, for a growth rate of 9%. Austin is next with a forecast of 26 hotels with 3,387 rooms on the way, according to the report.

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Among those en route is a 17-story citizenM hotel, which rises from a former parking lot in the heart of downtown at Colorado and Seventh streets. The hotel is expected to open in 2023.

“As an exciting cultural hub and an influential technology and business hub, Austin has been on our radar for years,” said Ernest Lee, citizenM’s managing director for the Americas. “Now, with the city’s emergence as one of North America’s most important destinations for knowledge workers, it is cementing its place on the national stage.”

Other downtown Austin hotel projects underway include two Hyatt-branded hotels at Fifth and Brazos streets. The recently opened luxury Thompson Austin Hotel, a 229-room property in San Jacinto that includes the smaller 193-unit Tommie Austin in the same location.

State reporter Shonda Novak contributed to this report.

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