By the end of 2015, downtown Austin could have as many as 2,534 new apartment units in nine different complexes, said Michael Knox of the city of Austin’s Economic Growth and Redevelopment Office. Of the planned apartments, 1,122 units are under construction, said Charles Heimsath, president of Capitol Market Research, an Austin-based real estate research firm. Heimsath said the 1,122 units represent approximately 13 percent of the apartment units under construction within Central Austin.
“The demand, as measured by occupancy and sales, has been just extraordinary,” Heimsath said. “I think that everybody has been a little bit surprised at the strength of downtown.”
A desire by people to rely less on cars and live in a place that is walkable to destinations is fueling a desire to live downtown, said Jude Galligan, the owner of REATX, a local real estate brokerage firm. As a desire to live downtown shows no signs of decreasing, real estate experts predict more multifamily projects to be announced in the future.
“The suburbs are no longer adequate for how people are choosing to live their lives, whether they are millennials, [Generation] Y or empty-nesters,” Galligan said. “It’s a feeling of connectedness that the suburbs and car-centric communities cannot provide. The place where a city can provide this is in its central urban core.”
Steady price increase
While the economic downturn reduced the average apartment rent throughout Austin, the rents for downtown apartments have steadily increased, Heimsath said. The average price of a downtown apartment is approximately $2.30 per square foot, which is about double the average price of apartments in other parts of Austin, Heimsath said.
Among the multifamily projects in development is Capital Studios, the first new downtown affordable housing community in 45 years, said Foundation Communities Executive Director Walter Moreau. Foundation Communities, a local nonprofit that provides affordable housing, was awarded the tax credits on July 26 needed to build Capital Studios.
Capital Studios will have 135 efficiency apartments that will range from $400–$650 per month, which includes all bills.
“I think it’s important for our community to not become so expensive that lower-income working folks have to move farther and farther away, or from the region all together,” Moreau said. “I want to live in an Austin that is still mixed income.”
Jeff Jack, former president of the Austin Neighborhood Council and current chair of the city of Austin Board of Adjustment, said Capital Studios is a “great” project. However, he does not think it will come close to meeting the need for affordable housing in the area.
“It’s not nearly enough to satisfy the need for housing the employees [that work] downtown,” he said.
Lack of condominium projects
While there are multiple downtown apartment projects in the pipeline, there are no known condos in development, Galligan said.
Galligan said clients consistently ask him about downtown condos, but he said he does not have any to show them.
Heimsath said a lack of new downtown condo projects is because of a reluctance by national investors to put money into such projects.
“[Financiers have been saying that] ‘Austin is great, but the condo market isn’t great nationally, and we’re really not sure how deep the market is in Austin, so we’re not interested in adding to that,’” he said.
However, Heimsath said he thinks the lack of available downtown condos is changing that attitude. Both Heimsath and Galligan said they expect to see at least one new condo project either submit plans to the city or break ground within the next year or two.
“I would imagine that the more sophisticated, progressive developers with access to the right channels of capital are [speculating] new condo projects right now,” Galligan said.
Greater Austin area
While there is a focus on downtown apartment development, Galligan said the area surrounding the city’s core has also seen a significant increase in new apartment activity.
Parts of South Austin and areas near The University of Texas have seen just as much apartment development as downtown, Galligan said. There are 8,347 apartment units under construction in Central Austin, Heimsath said.
Shandy Kellams, the assistant business manager for Eleven, an apartment complex opening in September at 811 E. 11th St., said interest has been high for living near downtown in East Austin.
“It’s awesome for people who want to live downtown but don’t want to pay those [downtown] prices,” she said.
Galligan said the same forces driving people to live downtown are the same reasons people move to Central Austin.
“For the core, it is a very healthy trend to see people moving back into the cities, to get back into the walkable lifestyle and to be connected again,” he said.
Source: Original Post
High profile lakeside apartment project ramps up construction
The high-rise apartment community under construction near South Congress Avenue and Barton Springs Road has been rebranded as The Catherine.
The 19-story building under construction just to the south of the Hyatt Regency Austin is a partnership between the Hunt Cos. Inc. of El Paso and SLR Residential, an affiliate of StreetLights Residential of Dallas.
The Hunt Cos. in partnership with SLR Residential is building The Catherine on Barton Springs Road just west of Congress Avenue. The provided rendering alludes to the fact that the Hyatt Regency Austin will obscure some views of downtown Austin.
Courtesy of Rhode Partners
The project, which has been a long time in the works, is now at the fifth floor of construction, and the first phase will be delivered about a year from now, according to Jim Dobbie, senior vice president of development for Hunt’s southwest division.
The partnership acquired the site at 214 Barton Springs Road in December 2012 from Crescent Resources LLC, which had planned to build condominiums dubbed, “Aquaterra” since 2006. The recession stalled those plans and eventually Crescent Resources filed for Chapter 11 reorganization. After that process, the company decided to sell. Hunt and SLR Residential are equally involved and are joint general contractors, as well. The Catherine is their first partnership.
“We changed the name because we like to brand our own projects,” Dobbie said.
The flood of new luxury apartments to open in the downtown market during the next 18 months does not have the developer worried about oversupply.
“The market is receiving these projects very well. Austin is showing it’s a very strong town,” Dobbie said. “The general trend we’re seeing is that not only GenYers are interested but baby boomers are also looking for high quality apartments with the same kind of amenities.”
The Catherine will have five stories of parking, topped by a sixth floor of high end amenities, including a pool deck, fitness center and leasing office.
Dobbie said apartments likely will be priced around $2 per square foot, substantially less than the $3 per square foot being charged for some units at The Whitley, which is finished and largely leased.
The bulk of the units at The Catherine will be one-bedrooms. Two-bedrooms, studios and two-story penthouses also will be available.
The block surrounding The Catherine is a hub of activity. The Hyatt Regency Austin is building a parking garage and ballroom. Directly to the west, Alliance Residential is building more low-rise apartments.
Dobbie said all of the construction equipment and activity hasn’t hindered progress at The Catherine.
“We’ve all got a cooperative relationship,” Dobbie said.
Source: Original Post