The REX Effect: How DivcoWest Closed the Experience Gap at Bouldin Creek
How DivcoWest bet on wellness-driven office in South Austin and proved that health-focused assets command different economics in challenging markets
Vision
When DivcoWest acquired Bouldin Creek in August 2021, Austin's office market stood at 19% vacancy. By 2025, that number would climb to nearly 25%. Most investors saw risk. DivcoWest saw opportunity: wellness-focused assets would outperform commodity space even as overall vacancy climbed.
The thesis wasn't about amenities. It was about tenant infrastructure that supports how people actually work, particularly in Austin's tech and creative sectors, where talent wars are won by companies offering genuine wellness integration, not wellness theater.
Bouldin Creek's South Lamar location offered something commodity towers couldn't replicate: authentic neighborhood energy. Walk Score 83, Bike Score 93, and just 1.2 miles to downtown via dedicated bike lanes, surrounded by world-class restaurants like Loro and Uchi. But location alone doesn't win. DivcoWest needed to operationalize wellness at scale.
Market & Ideal Tenants
Austin's office market tells two stories: overall vacancy hovers around 24.8%, with Class A asking rents at $51.81 per square foot. But wellness-focused properties in walkable neighborhoods outperform dramatically.
South Lamar's Walk Score of 83 puts tenants within easy walking distance of world-class restaurants, eclectic shops, and arts and entertainment venues. The neighborhood attracts precisely the personas DivcoWest targeted:
- Who they are: Tech startups scaling post-Series A, creative agencies, content production companies, health-focused brands seeking authentic alignment between values and workspace
- What drives them: Talent retention in competitive hiring markets, genuine wellness integration (not performative), walkable lifestyle that supports hybrid work patterns, biophilic design that reduces stress
- Where they spend time: Two acres of green space with mature native trees and trail systems, rooftop deck with downtown views, fitness center with lockers and showers, outdoor terraces for al fresco meetings
- Pain points they face: Downtown towers disconnected from neighborhood life, buildings where "wellness" means a sad treadmill in the basement, spaces that don't support hybrid schedules requiring flexibility
Closing the Experience Gap
DivcoWest partnered with HqO to transform Bouldin Creek from a wellness-designed asset to a wellness-operating system. Rather than managing programming through spreadsheets, the property team orchestrates tenant experience through HqO's platform, from fitness center bookings to on-site café coordination to outdoor workspace reservations.
The results prove the thesis: 37.67% of the building population registered on HqO: engagement that demonstrates tenants don't just work at Bouldin Creek; they actively participate in the wellness ecosystem DivcoWest created.
The Experience Payoff
- $103 million refinancing secured from TIAA just one year after acquisition, validating DivcoWest's wellness-first positioning in a softening market
- LEED Gold certification with operational systems that deliver genuine sustainability, not just plaques
- 37.67% tenant app engagement, proving wellness infrastructure drives measurable participation when operationalized through technology
- Sublease activity at Bouldin Creek, including National Veterinary Associates' 30,646 SF lease, demonstrating demand even as Austin overall struggles with negative absorption
- Premium positioning maintained as Austin office vacancy climbed from 19% to 25%, proving wellness-focused assets create defensible differentiation
Voices of the Experience
"High-quality office assets with a focus on health, wellness and productivity, like Bouldin Creek, are seeing the strongest leasing tailwinds in the market today and are among the best-positioned assets for future growth." — Michael Provost, Head of Investments, DivcoWest Southwest Region
Experience Lessons Learned
- Wellness beats wellness theater. Tenants engage with operationalized health infrastructure—2 acres of trails, fitness integration, outdoor workspaces—not token amenities.
- Neighborhood authenticity is infrastructure. South Lamar's walkability and restaurant scene attract talent that drives leasing decisions.
- Technology operationalizes vision. 37.67% app engagement proves HqO transformed wellness design into measurable tenant participation.
- Market downturns reveal quality. As Austin vacancy climbed to 25%, wellness-focused assets like Bouldin Creek maintained momentum through authentic differentiation.
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