Amid challenging conditions in the real estate and lending markets, a proposed 80-story residential tower that had been planned to be the tallest high-rise in Texas has now been scaled back to 45 stories.

Instead of soaring 80 stories — 1,035 feet tall — and having 450 apartment units, Wilson Capital, the Austin-based real estate firm developing the project, now envisions a building with 350 apartment homes in a 45-story tower.

Named Wilson Tower, the high-rise would be built at 410 E. Fifth St. The site formerly housed the Avenue Lofts, which Wilson Capital bought in December 2021.

Taylor Wilson, president of Wilson Capital, said the revised design comes in response both to feedback from Austin's Design Commission and to significant changes in the real estate and financial markets, which are grappling with rising interest rates and tightened lending standards.

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At a recent meeting of the Design Commission, an advisory body to the Austin City Council, one commissioner cited a preference for more public benefit from the project.

"We are making some changes to the ground floor in response to both the Design Commission’s feedback and changes to the vertical nature of the building in response to current market conditions," Wilson said in an email to the American-Statesman. "Construction costs and interest rates are both higher now than they were when we originally designed the project. We believe this new design is more appropriate to provide an activated ground floor while remaining feasible in today’s environment."

Wilson said he expects construction to start on Wilson Tower this year. He did not disclose any details about financing for the project and its projected cost. An estimated timetable for the tower's completion also was not provided.

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With the revised plans for Wilson Tower, a skyscraper called Waterline, now under construction at 98 Red River St., is on track to become the tallest tower in Texas. The mixed-use Waterline skyscraper is slated to rise 74 stories and be 1,022 feet tall. At that height, it will surpass the 75-story JPMorgan Chase Tower (formerly Texas Commerce Tower) that soars 1,002 feet in downtown Houston.

Although not yet finished, the Sixth and Guadalupe mixed-use tower, which has reached its highest point of construction at 66 stories and is due to open this year, is currently the tallest building on the Austin skyline. It surpasses the Independent, a 58-story completed condo project often referred to as the "Jenga Tower" in the Seaholm District downtown.

In an email in November, Michael Lynd Jr., a co-developer of Waterline and Sixth and Guadalupe, said that despite uncertainty in the real estate market with the economy contracting and unprecedented inflation, Austin remains "one of the best markets in the country."

"We are confident in Austin’s long-term growth prospects and massive macro tailwind," said Lynd, chief executive of Kairoi Residential, which is developing Waterline and Sixth and Guadalupe with partner Lincoln Property Group. "Austin still possesses an unparalleled lifestyle, an incredibly educated workforce, and it enjoys the advantages afforded by Texas’ tax and regulatory environment. These attributes will continue to be attractive to businesses interested in expanding or relocating."

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If it breaks ground as planned, Wilson Tower would add to downtown's building boom that has taken place in successive waves over the past couple of decades. A number of buildings — residential, hotel, office and mixed-use — are under construction or planned.

Wilson Tower is being designed by the Austin office of global architecture firm HKS Inc., with interior design by Britt Design Group.

Wilson said the project will add to the density along the city’s transit corridors "to accommodate the unprecedented level of population growth Austin is experiencing."

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Other projects

Along with plans for its downtown tower, Wilson Capital has thousands of other apartments built, under construction and planned in the Austin region.

The company recently started construction on three new multifamily projects in the Austin area totaling 708 units. Those projects are the Bower, 294 units in Pflugerville; Local at Dripping Springs, with 204 units; and Jovie Lakeway, an age-restricted community with 210 units in Lakeway.

Wilson Capital has 1,894 units under construction across the Austin region, with plans to start an additional 885 units by the end of the year on sites the firm owns.

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“Multifamily has proven to be a resilient asset class in a wide variety of economic climates, and we firmly believe in the fundamentals and long-term growth of Austin," Wilson said in an April 14 news release. "While meaningful levels of supply are currently being delivered, we believe there will be a period from 2025–2027 when new deliveries will be significantly less than usual given the current challenges preventing many new multifamily developments from starting. Our goal is to fill that gap with the new projects we are developing as they will be delivering in that time frame."

In the April 14 release, Wilson reiterated his comments about the shifting financial landscape.

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“Changing market conditions, notably rising construction costs and interest rates, have driven our firm to be very selective about which projects to move forward with and how to go about programming them," Wilson said. "Projects and designs that made sense in 2021-2022 do not necessarily work in the current environment."

Wilson Capital acquires and develops real estate in prime locations throughout Central Texas. Since 2017, Wilson Capital and its executives have completed more than $3.3 billion in real estate projects spanning the multifamily, senior living and student housing sectors to single-family housing and land development.

This article originally appeared on Austin American-Statesman: Wilson Tower, once planned to be Texas' tallest building, scaled back