Intracorp Adding More Retail Space to South Congress
By Sahar Chmais, Austin Business Journal
A new retail hub likened to Music Lane is about to spring up a block or two from where the shopping action currently ends on South Congress Avenue.
Leland South Congress, a mid-rise condo building by Intracorp, plans to offer 23,000 square feet of retail space on the ground floor of its 265 residential units. The project, at 2105 S. Congress Ave., was most recently a temporary home for artists, and before that it was a rehabilitation center. Prior to that, it was a senior facility and before that, it was a brothel. Across the street is tech company SpyCloud, exemplary of a changing South Congress, because once upon a time its building was an adult movie theater.
Leland’s location could be a bridge between the already bustling South Congress and the incoming destination H-E-B that is a short walk down from Leland South Congress. This H-E-B will not only be a place to procure groceries, but it will be a place to gather for live music, food and coffee with indoor and outdoor seating, if all goes as planned. South Congress Avenue is also slated to get a commuter train that spans to Oltorf Street just south of Leland South Congress.
“We’re a big part of filling in that area, or as I see it, kind of pulling the center of gravity of the South Congress retail district a little further south towards Oltorf,” said Brad Stein, president of Intracorp Texas.
Leland South Congress will feature a paseo, similar to Music Lane, with eight to nine spaces for retail, food and beverage, Stein said. The development has allocated two restaurant spaces, one that’s about 4,000 square feet and another that’s about 6,000 square feet with an option to extend it to 9,000 square feet, Stein said.
Leland South Congress retail is fair game to a variety of options including clothing stores, ice cream shops, fitness boutiques and more. The project is betting on a walkable and bikable element, including a separation from the street through some green space.
Intracorp is paying special attention to the retail component in this project, though that’s not what the developer typically focuses on. For example, at its new 44 East Ave tower downtown, the building had space for one restaurant, formerly Bacalar, and a walk-up window for food from Tomalo.
As South Congress Avenue commands the highest retail rental rates in the region, Intracorp couldn't resist going in more on shop space.
“With all this frontage on South Congress, it had to have a very significant retail component to it. A lot of projects, you'll see that maybe the retail component is maybe an afterthought to the residential, but we knew that with a project of this size, and being so prominent in South Congress, that you really have to curate the retail and make sure that it mixes with the residents,” Stein said.
The developer held dialogue with Steve Wertheimer, owner of Continental Club and C-Boy’s Heart & Soul on South Congress, about the project and noted Wertheimer’s thoughts to make sure the retails fits into the neighborhood.
“We're not planning to do a music venue, but I think it's more of having this open line of communication with Steve to see how what we do kind of complements what he's done on South Congress,” Stein said.
The development wants to attract local and non-local tenants that would appeal to residents and visitors.
“We would love to have local tenants that are here, but at the same time, you know how South Congress is evolving, and so we definitely want to bring offerings that people are going to take advantage of,” Stein said. "It's got to be tenants that are going to appeal to both the Austin resident and the Austin visitor.”
The condos are expected to come online sometime in 2027. The retail portion of the project is in its pre-leasing phase. The plan is to break ground in the fall, Stein said. Stein said he has received some letters of intent, but declined to share who has expressed interest in the space.
Intracorp tapped Michael Hsu Office of Architecture to design the condos, amenity spaces and retail. Shop Companies is handling the retail leasing for Leland South Congress.
Stein did not disclose the cost of the project’s buildout but said it will be in line with building a downtown high-rise.
Retail rental prices on South Congress have risen to about $200 a square foot, John Heffington of Shop Companies said recently. That's pricier even than the Domain area in North Austin, which came in second.
Leland South Congress’ retail rents are going to be “lower” than the $200 price mark, said Stein, but did not specify how much lower.
Retail space in Austin is difficult to come by with a metro average of 97%, but options become razor-thin in the Central Business District. Since 2020, the CBD had not delivered any retail space, according to CBRE data. In the third and fourth quarters of 2023, there was a 99% retail occupancy rate in the CBD.
This year, Austin's market is on track to report about 572,000 square feet of construction in new and expanded retail projects — and H-E-B makes up nearly half of the new space, according to Weitzman.
