A new chapter for Austin: Inside the 2025 State of Downtown report

aerial view of the austin skyline with skyscrapers, the colorado river, pedestrian bridges and trees — More than 6.6 million sqft of space is under construction in Downtown Austin.

Downtown Austin is entering a new era — and it’s one defined by cranes, concrete, and billions in investment.

The Downtown Austin Alliance’s 2025 State of Downtown report is here, offering a data-rich snapshot of the Capital City’s urban core. This year’s study — titled “Breaking Ground” — paints a picture of a city in transition, with millions of square feet under construction, shifting residential + office market trends, and developments set to reshape Austin for generations.

Allow us to break it down for you.

Development

Mayor Kirk Watson often refers to Downtown as “Austin’s living room,” and right now, it’s being remodeled.

Downtown Austin’s transformation is anchored by massive projects — including a highway reconstruction, the revitalization of a historic entertainment strip, and a reimagined convention center — that are all underway or set to break ground soon.

A rendering of the new Austin Convention Center showcases a spacious outdoor walkway with people walking, socializing, and engaging with a food truck. A large, colorful canopy with intricate patterns and abstract designs stretches overhead. The surrounding area features lush greenery, modern architecture with glass and stone elements, and a backdrop of high-rise buildings under a bright sky. — The new Austin Convention Center will feature sweeping art installations, like this example of a colorful canopy walkway.

Here are the developments to keep an eye on:

I-35 Capital Express Central Project | Broke ground in 2024
Project Connect | Set to break ground in 2027
Austin Convention Center | Scheduled to reopen in late 2028
Waterloo Greenway’s Phase II, The Confluence | Expected to wrap in 2026
Capitol Complex’s Phase II | Expected to be complete in 2026
Old Sixth Street | Began leasing in 2024
Congress Avenue Urban Design Initiative | Final plan expected in 2025

But wait, there’s more. As cranes continue to dot Downtown Austin’s skyline, eight projects are slated for completion in 2025. Key additions include:

The Republic, an office tower
Waterline, the tallest skyscraper in Downtown Austin
415 Colorado, an apartment complex

A graphic of Downtown Austin with buildings highlighted in green, grey, and red to signal projects completed, under construction, and in planning. — Hotel projects under construction in Downtown Austin will add 890 rooms, while residential projects will add over 2,600 units.

Office market

According to the State of Downtown, Austin’s business core is becoming broader and more resilient. Properties once dominated by tech companies are now drawing a more diverse tenant base, with law firms, financial institutions, and professional service providers leading the surge in demand.

Vacancy rates are still high, increasing from 17.3% in 2023 to 22% in 2024, but those stats haven’t halted new builds. Around 1.34 million sqft of office space is currently under construction.

So, who’s working in these towers? About 131,833 Austinites make up Downtown’s employment market, and ~61% are between the ages of 30 and 54. The top five industries they work in are: professional, scientific, and technical services; public administration, accommodation and food services, information, and health care + social assistance.

Tourism

A large crowd gathers in front of an illuminated outdoor stage during a music festival. The stage is lit in red, with screens displaying visuals of the performer, Chappell Roan. In the background, the skyline of Austin with tall buildings, some under construction, can be seen at dusk. White tents are scattered throughout the festival grounds. — Approximately 450,000 people attended ACL Festival in 2024.

40.2 million. That’s how many out-of-towners visited “Austin’s living room” in 2024, largely thanks to events like SXSW, ACL Festival, Texas Longhorn football games, Texas Book Festival, and Moontowner Comedy Festival.

Austin consistently ranks among the most desirable travel destinations in the US, and the proof is in the pudding. Austin-Bergstrom International Airport had its second-busiest year on record in 2024, only behind 2023.

Here’s how Downtown tourism impacted our local economy in 2024:

Total travel spending: $9.3 billion
Total direct earnings: $3 billion
Travel spending tax revenue: $776 million
Total direct employment generated: 68,440

When tourists come to town, they like to stay in the heart of the city. Hotel demand in Downtown increased by 3.6% in the last year and several projects are nearing completion:

1 Hotel | Set to open in 2026
Hotel Trinity | Set to open in 2026
Graduate Austin | Set to open in 2027

Residential market

A colorful living room, with green couches and many plants, sits in front of floor-to-ceiling windows with views of Lady Bird Lake and Downtown Austin in the background. — Around 15,330 people currently call Downtown Austin home.

Like the rest of Austin, Downtown is experiencing a dip in rental prices, which is driven by an increased supply of new units. More than 1,400 new residential units are expected to be completed in 2025, helping ease demand and open the door to more lease incentives for potential renters.

A few quick stats on the Downtown housing market:

Occupancy rate: 87.3%
Asking rent per sqft: $3.44
Total condo units: 4,429
Total multifamily units: 8,291

Retail market

Finally, what’s a bustling Downtown without plenty of shopping opportunities? This year’s report states that retail occupancy rates are steady, hovering above 97%. Over the last year, the main challenges in Downtown’s retail sector were rising construction and labor costs, accessibility, and perception of safety.

Eager to learn more? Read the full report.

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