FEATURE ARTICLE, MAY 2007

Building Austin’s Future
Many anticipate that Endeavor Real Estate Group’s newest project will stimulate the creation of a second downtown in Texas’ capital city.
Lindsey Walker

Phase I of the domain features high end tenants like Neiman-Marcus, Louis Vuitton and Tiffany & Co.

When Austin, Texas-based Endeavor Real Estate Group purchased 230 acres in North Austin from IBM in 1999, the company had plans to demolish the existing manufacturing and service-center buildings and create a new, state-of-the-art office complex for dot-com companies. Due to the ensuing dot-com bust in March 2000, that strategy “quickly failed,” according to managing principal Kirk Rudy, and Endeavor had to figure out how to create value on the land. Their decision: a mixed-use community that could be a major catalyst for the creation of Austin’s second downtown.

The project, called the Domain, features two distinct phases. The first — a luxury lifestyle center with approximately 700,000 square feet of retail space; 394 multifamily units; 85,000 square feet of office space; and a 330-room Westin hotel — opened in March. The 57-acre development, which targets high-end consumers and features tenants such as Neiman-Marcus, Louis Vuitton and Tiffany & Co., was co-developed by Indianapolis-based Simon Property Group.

Phase II of The Domain will have 1 million square feet of additional retail space, 4,000 residential units, two boutique hotels, a grocery store and 3.5 million square feet of office space.

The Domain Phase II, which currently is under construction on 177 acres of adjacent land, will boast 7.5 million square feet of improvements including around 1 million square feet of additional retail space; 4,000 residential units; two boutique hotels; a grocery store; and 3.5 million square feet of office space. Phase II, which will be anchored by Nordstrom and a yet-to-be-named second department store, focuses on a much broader demographic than the first phase and will feature high-end stores as well as soft goods, hard goods, juniors and kids. “It will be a much more comprehensive target market,” Rudy says. “There’ll be a large number of local and regional retailers as well.” Chicago-based RREEF is a partner in the second phase, which, according to Rudy, is “almost like building a second city.” The development calls for an overall 13-year build out with the first section — the retail district — scheduled to open before fall 2011.

Phase I of the Domain in Austin, Texas, featured a luxury lifestyle center with 700,000 square feet of retail space.

While both phases of the Domain feature development aspects that can be seen elsewhere in Austin, each also brings something unique to Texas’ capital city. “The first phase is a very dense, mixed-use vertical community. It’s something that Austin hasn’t seen before,” Rudy says.

And, with the addition of the second phase, Endeavor believes it will create a second downtown to Austin. “If you overlay downtown from north to south and east to west — what people think of as the central business district — it’s roughly the same size [as the Domain],” says Chad Marsh, principal with Endeavor. “The development is located maybe 10 miles away from downtown in an area that’s not controversial because there’s no environmental concerns. It’s a desired development area, and we truly think over time this will be that second place in Austin where people will want to live, work and play.”

Neiman-Marcus anchors phase I of the Domain.

The Domain also sets itself apart from other retail developments in Austin in that it aligns itself with the regional planning goals for Central Texas. Envision Central Texas is a multi-million dollar, 3.5-year effort consisting of community leaders who want to make sure that Austin grows sensibly and with the best interest of its citizens in mind. The group, according to Rudy, has decided that it wants the city to develop in very dense activity nodes instead of in massive master-planned communities on the edges of the city, and these nodes should have multiple uses that are integrated with one another. The Domain is just that.

What’s more, the Domain is located at the base of a brand new $2.3 billion toll road system; it is adjacent to the commuter rail line, which will be activated in 2008; and it is situated right at three major arterials, MoPac Boulevard, Loop 360 and Highway 183. “For all of these reasons, the Domain has received a very positive community response,” Rudy says.

With Endeavor Real Estate Group’s vast experience in retail development, the Domain is in good hands. Endeavor has a number of projects to its name in Central Texas, from the 458-acre SouthPark Meadows in South Austin to the 750,000-square-foot 1890 Ranch project in Cedar Park. The company also is under construction with a 400,000-square-foot IKEA-anchored project called University Oaks in Round Rock. “We formed the company in March 1999, and since then we’ve developed more than 4 or 5 million square feet of space,” Rudy says. “Currently, we’ve got nearly 12 million square feet of projects, including the Domain, in various stages of development throughout the state.”

With that in mind, it’s no wonder the company feels confident about the future of its latest endeavor. From the project’s exceptional location to its impressive tenant line-up to the community’s warm response to its first phase, the Domain is on track to make a big impact on the future growth of Austin. “For this first phase to have been so well-received is a good litmus test for how well we think the second phase will do,” Marsh says. “The Domain is well on its way to achieving the goals of city leaders to counterbalance sprawl, reduce commute times and provide a sustainable community for the next several decades.”


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