Blackstone Mortgage Trust is providing a $675 million loan to Lincoln Property Company and Kairoi Residential for the construction of a mixed-use tower that will reshape the Austin, Texas skyline.
The financing package was issued on September 6 for the development of Waterline, a 74-story tower to be located at 98 Red River Street in Austin. Upon its completion, the 1,022-foot Waterline tower would surpass Houston’s 1,002-foot JPMorgan Chase Tower as the state’s tallest property. It is slated for delivery in late 2026.
The Public Sector Pension Investment Board, a Canada-based pension investment manager, is working as the main equity partner on the development, and Eastdil Secured worked as the financing advisor to the sponsors.
LPC and Kairoi are targeting LEED Gold certification throughout the building, which comprises 352 luxury apartments, 700,000 square feet of office space and the sustainability-focused, 251-room 1 Hotel Austin to be managed by SH Hotel Resorts.
“We continue to see strong demand for new, best-in-class residential, office and hospitality assets in high growth markets like Austin and are excited to support this trophy, mixed use development that will make a meaningful contribution to the community as well as the Austin skyline,” said Katie Keenan, CEO of BXMT.
Waterline will be divided into floor-based tiers separating out its different use components and was designed by Kohn Pedersen Fox, who also worked as the architecture lead on 55 Hudson Yards and One Vanderbilt in New York City.
Carole Guérin, managing director and head of Americas, real estate investments at PSP Investments, said the pension fund has high conviction on the Austin market. “This investment provides significant upside potential as the city of Austin continues its expansion to become a top-tier US market that offers high quality of life, a supportive business environment, exciting employment opportunities and a hotbed for technology and innovation,” she added.
The ground floor of Waterline will feature 24,000 square feet of public retail and restaurant space with 1 Hotel Austin nestled on the next 13 floors with a ballroom and meeting spaces on the 14th floor and a rooftop pool on the 16th floor.
LPC and Kairoi said the office section of the tower will span 27 stories with a 14th floor amenity deck as well as a fitness center on the second floor. The upscaled residences will take up the remaining top 33 stories of the building and feature similar amenities.
Local infrastructure and green space upgrades are also featured in the Waterline project. The development is slated to add two new pedestrian bridges over Waller Creek from the west to help connect the central business district to the Rainey Street district. Three additional public pedestrian and bike access points are also included in the project.
The development team plans to contribute $1 million to the Waterloo Greenway Project to fund improvements to the urban trail connecting the University of Texas at Austin to Lady Bird Lake, LPC and Kairoi noted.