If you a have unlimited resources, downtown living doesn’t get much nicer than the top of the Austonian. With a top-of-the-line 8,000 square foot penthouse priced at more than $8 million in what will be the tallest residential building west of the Mississippi, few projects are as ambitious as the Austonian.

At a press conference today, media were taken on a tour of the 10th floor of The Austonian, which, when finished, will serve as an urban garden complete with a 75-foot pool, fountains, private cabanas, two outdoor kitchens, two outdoor fireplaces, a secured dog park and wireless Internet.



At the event, the developers confirmed that construction of The Austonian, Austin’s tallest building and Texas’ tallest residential high rise building, is on schedule and will be completed at the pace of one floor per week. Under construction at 200 Congress in downtown Austin, the 56-story luxury high-rise condominium project is expected to be complete by early 2010. During construction of the tower, an estimated 500 cubic yards of concrete (about 55 truckloads) and 50 tons of structural steel will go into each level

Here are additional facts on the Austonian:

Height of Building: 683 feet; 56 stories

Gross Area Square Feet: 850,000

Total Residential Area Square Feet: 600,000

Total Number of Units: 188

Unit Size: 1,221 to 8,379 square feet

Shared Amenities: Over 40,000 square feet

Price Range: $559,000 to $8M+

Amenities: 24-hour concierge and security services, 24-hour valet service, housekeeping, dry cleaning and laundry services, Lobby-level retail, Secure climate controlled wine storage, Billiard room, 4 Guest suites, Private spa treatment rooms, Screening room with seating for 12, Conference room, Swimming pool, fitness center.

Tags: austonian, news

AustinTowers.net was featured tonight on Fox News 7 during a piece about the Austonian. Our Editor, Paul D’Arcy, shared his opinion that it is a difficult time to sell expensive condos with the stock market in decline, the economy struggling, mortgage rates rising, and gas prices at a record high. Still, he shared with the reporter, the Austin condo market has been remarkably stable with all units being delivered in 2009 essentially sold out.

Tags: about austintowers

As everyone knows, the price of a downtown Austin condo has increased over the last few years. While supply and demand play their usual role, one of the major factors in rising condo prices has been the rising cost of construction.

For new condo projects, building costs have increased substantially since 2006. As the cost of concrete, steel, and rebar increase, the total cost of downtown construction increases accordingly. With so much simultaneous building, labor costs and crane costs are also on the rise. Finally, with demand for downtown land still very strong, escalating lot prices can add significant costs to new projects.

One reason that this is important is that newly developed condo units play an important role in setting market pricing for all downtown condo units. If new units are nicer, cheaper, and better located than existing inventory, prices can move down across the board as owners of existing units lower prices to remain competitive with buyers. When construction costs rise -- and new units are more expensive -- two things happen. First, fewer new project get built tighting supply. Second, new units hit the market at a higher price, subsequently pushing prices upward or, if insufficient demand exists, failing to sell.

Here is additional analysis from the Austin Business Journal:

The U.S. Bureau of Labor Statistics added more bad news this week for contractors and developers trying to get buildings out of the ground.Construction material costs increased 10.4 percent during the past year, the agency reported on Tuesday. The bureau's producer price index measures materials used in construction, including diesel fuel. Meanwhile, highway construction materials increased 18.9 percent during the past 12 months.Ken Simonson, economist for the Associated General Contractors of America, says in a statement "surging prices for diesel fuel, asphalt, steel and other materials are clobbering construction budgets."He says asphalt prices during the first two weeks in July have increased by 40 percent. Rebar has increased $200 per ton.And Simonson says the situation could get worse.

Tags: market analysis, costs

As always, if you use Google for search, we've made it easy to add our news feed to your google home page. Simply click on the "Add to Google" button on the right and you will be directed to Google to create an iGoogle search page like the one below, to add AustinTowers to an existing iGoogle page, or to add AustinTowers to Google Reader. Once added, you'll see our latest headlines whenever you visit your iGoogle page to conduct a web search. If you later change your mind, it's easy to remove the AustinTowers feed or to revert to a basic search page.



As many of you know, you can also subscribe to the AustinTowers feed on this site by simply clicking the Orange RSS feed button on the sidebar or by following this link: AustinTowers RSS Feed

Tags: about austintowers

During the last decade, the Austin apartment rental market has been the jewel of Texas. With rapid population growth and an affluent market, rents continued to rise year after year as new units hit the market. This is quickly changing.

Over the last couple of months, the AMLI apartments downtown have been offering tenants who renew an unprecedented 30% discount. This is strong evidence that the downtown rental market -- with many new units arriving this year -- is going to see a new level of competition for tenants. This is good news for anyone who wants to live downtown as lower rents make units accessible to a broader population. It’s bad news for investors and developers who will see rental incomes decline.

Here is what is happening:

- June rental occupancy in the broad Austin market has declined 1.5 points to 93.4%.

- There are 1,000 fewer untits being occupied today than at the beginning of the year

- Nearly 13,000 new units are being completed in greater Austin in 2009

- The new AMLI tower, the Monarch, and Legacy on Town Lake will add a signigicant number of downtown units in 2009

- The Monarch -- one of the first downtown rental projects to open this year -- is 45% leased and 25% occupied today. That leaves a lot of units looking for tenants.

Here is an excellent analysis from the Statesman:

"The market remains in decent shape for the moment, but it's concerning that the loss of momentum is so pronounced," Willett said. "Plus, with so much additional product now under construction, it's pretty easy to see the headlights of that train bearing down on you."

Austin is on track to add 12,810 apartment units through the end of 2009, according to M/PF. That's the third biggest block of new supply on the way anywhere in the country, trailing only the 19,217 units under construction in Dallas/Fort Worth and the 18,848 units under way in Houston, M/PF reports.

Willett said the Austin area needs about half as many units as are now under construction based on current demand, which he says has been sluggish. He said there are 1,070 fewer occupied apartments now than at the start of this year. He predicts it will take two years for Austin to burn off its excess supply "if you stop building right now."

Willett says his forecast of a glut applies citywide, from downtown to the suburbs.

But Spencer Stuart, an executive with the developer building the 31-story Legacy on the Lake apartment tower on downtown's eastern edge, said leasing activity is strong in and near downtown, as well as areas closer in.

"We're seeing strong demand in the urban cores of all the markets we're in," said Stuart, senior managing director of Legacy Partners Residential Development Inc., a Foster City, Calif., firm with upscale apartments in states including California, Arizona, Colorado and Washington.

Legacy entered the Austin market in 2006 with it and Capmark Financial Inc.'s acquisition of the 2,044-unit Riata apartment community in Northwest Austin.

Riata was 97.1 percent occupied by the end of June, up from 89.8 percent as of Jan. 1, Stuart said.

Stuart predicts properties like Riata and the upscale apartments at the Domain in North Austin and in the downtown market are "going to do very well."

Also, rising gas prices "bode very well for the downtown market and for properties that are clustered in around a lot of the jobs, like the Arboretum," Stuart said. "If you can walk to your job, you can pay more for rent, and your lifestyle got better because you're spending less time commuting and more time working or playing."

But Willett stands by his forecast, contending that the Austin metro area, which "ranked as the star apartment market performer in Texas over the past few years ... is losing its luster."

He thinks the market will bottom out by the end of 2009 before occupancy begins ticking back up.

"As more and more of this product gets completed, you're going to start seeing the rent discounts kick in, and we're going to be in an incredibly competitive leasing environment in Austin," Willett said.

Rent growth already is slowing. Rents rose 3.6 percent from June 2007 to June 2008, compared to a pace as high as 6.1 percent during 2007, according to M/PF. The average monthly rent is now $839, up from $787 in June 2007, M/PF said.

Willett expects rents to be flat this year, as occupancy dips another 1.5 percentage points during the next 12 to 18 months. By year's end, he said, close to half of the apartment communities will be offering anywhere from a month to a month and a half of free rent.

"The leasing environment looks like it will be especially competitive at the top end of the market," Willett said. "Discounting probably will be rampant at the new communities in initial lease-up, and that seems apt to preclude any rent growth for the market as a whole."

Stuart thinks Willett will be proved wrong about the Austin market. He said he isn't worried about leasing up the 187-unit Legacy on the Lake, formerly Legacy@Town Lake. And the company is looking for a site for a second project, perhaps four stories tall, "as close to downtown as possible."

"We know there's a strong demand for the downtown lifestyle," Stuart said, adding that demand has been well-

established in the Rainey Street area, where the Legacy project is rising, with the selling out of nearby condominium projects like Milago and the newly built Shore.

Rents at Legacy on the Lake will range from $1,331 a month for a 659-square-foot unit to $6,931 a month for the four penthouses with 2,876 square feet, Stuart said. Leasing is expected to begin in August, with the first tenants moving in in October.

Stuart said Legacy could command — and get — higher rents for its downtown project but is sticking with the ones it initially projected in order to lease the building quickly.

At the new 29-story Monarch apartment tower on downtown's west side, 25 percent of the 305 units are occupied, and the building is 45 percent leased, representatives say.

Units rent from $1,333 a month for a 681-square-foot unit to $12,935 for the largest penthouse, with 3,530 square feet.

Monthly rents average $2,100 to $2,300 for the most popular one-bedroom, with about 1,100 square feet, and rents start at $2,630 for the most popular two-bedroom, with about 1,400 square feet.

Tenants include young professionals, entrepreneurs, executives, professors, a state senator, and transplants from New York and the West Coast, as well as people who plan to buy units in condominium projects now under construction downtown, representatives said.

Tags: market analysis, rental

First, AquaTerra was cancelled. Then the Monarch converted from condos to rental units. 1155 Barton Springs was indefinitely postponed. Now, the Metropolitan has decided to throw in the towel and shut down prior to construction.

The Metropolitan was conceptualized as a $50m 8 floor condo project on 11th Street near the Capital. With units priced from $250k to $1 million, the 84 unit project was expected to be completed in 2010. Like many real estate developers, the team behind the Metropolitan was facing tough times and a tough market. In fact, the developer -- Mote Group Real Estate Partners LLC -- filed for Chapter 11 bankruptcy June 30. As a result, the land for the project will be point up for sale soon.



As the credit crunch continues, there is less margin of error for poorly conceived projects. While Austin has seen some big recent successes - tthe Shore and 360, both of which sold out before completion -- other projects have struggled. As with other project cancellations -- the market worked quite well: the project was unable to get enough interested buyers to secure funding, leading to cancellation prior to ground-breaking. Outside of collapsing markets like Miami and Las Vegas, it is very uncommon for projects to be cancelled once ground has been broken. With more than a dozen planned condo projects and an uncertain market, the Metropolitan won’t be the last cancellation. That said, the success of recent projects likely means that new buildings will continue to be announced.

La Vista on Lavaca, an eight-story residential mixed-use tower consisting of 19 condominiums on the top four floors, a three-floor Executive Business Center, and first floor restaurant, seems to have halted construction mid-way throught the process. The project was being developed by Guerrero-McDonald.

While outside of the downtown focus of this site, La Vista on Lavaca may be an unusual mid-project catatrastrophe. Typically, projects do not break ground until they have lined-up enough sales to receive financing to support the entire construction process. The developers of La Vista on Lavaca -- which billed the project as “Downtown Living for Grown-up Texans” -- began construction after receiving a building permit and a street closure permit last April. They renewed the street closure permit once in November but failed to renew it at it’s recent anniversary.

While it is unknown why the project halted construction and whether it will resume, it appears that construction has actually been frozen for months. The developers claim that the project will be completed and that construction was to resume soon. They have not explained why it stopped for many months this winter and spring. There is also no word on how many units were actually sold and whether the buyer will receive credits or their money back for the severe construction delays.

With the interest raccumulating quickly and contracts that typically require developers to meet tight deadlines, mid-construction stoppages are extremely rare. Typically, stoppages only occur when projects run out of money or when the developer and key contractors win-up in a legal dispute.





Here is a summary from the Statesman:

Jeffee Palmer had gotten used to the inconvenience caused by construction on Lavaca Street between 17th and 18th streets, and then she started wondering what happened to it.

For almost a year, Palmer has taken a circuitous route around a part of West 17th Street that is closed at Lavaca to get to a parking garage a block from the William P. Clements State Office Building, where she works as an assistant attorney general. That part of 17th Street is a major eastbound link for several thousand state employees who work in the Stephen F. Austin, the William B. Travis, the Lyndon B. Johnson and other state buildings just to the east.

In addition to the 17th Street closure, a block of the right lane of Lavaca Street has been closed for almost a year.

The developers of La Vista on Lavaca, a luxury condominium and office project, took out a permit with the City of Austin on April 20, 2007, to close the block of 17th Street between Lavaca and Colorado streets during construction, said Jason Redfern, manager of the Right of Way Management Division in the city’s Watershed Protection and Development Review Department.

The developers paid $99,900 to the city to keep the street closed for six months, Redfern said. The permit was to have been renewed for the same fee every six months until construction was completed.

The developers renewed their street permit in November 2007 but failed to renew it in April, Redfern said.

No one in Redfern’s department knew when construction stopped, but Palmer said she has not seen anyone working at the site for months.

Martin Luther King Jr. Boulevard to the north and West 15th Street to the south are strained during rush hour, Palmer said. Impatient motorists often drive into parking garages through the exit ramps to avoid traffic, she said.

As she stood in front of the construction site Tuesday, two Department of Public Safety squad cars drove into the garage from the exit-only side.

Palmer said she began searching the Internet about three weeks ago for a phone number to call to get an answer about why the street remained closed.

An e-mail inquiry to the Public Works’ Street and Bridge Division yielded a telephone number that provided an automated message offering Palmer several options for having building permit questions answered.

“I was trying to find out what kind of animal is this that the city can close down public access indefinitely,” Palmer said. “I realized that it was going to take me too much work to find out. That’s when I got in touch with Statesman Watch.”

Until Tuesday, Redfern said, the city was not aware that the developers owed $99,900 to renew the street closure permit and didn’t know why construction had stopped.

Redfern said that he began making inquiries and that he was told that construction would resume soon. “This one is very unusual,” Redfern said. “You normally don’t see construction starting and stopping like this.”

Mary Guerrero-McDonald, one of the principals in the La Vista on Lavaca development, disputed the city’s contention that its street permits were not current.

Tags: news

One of the most common questions asked by first time condo buyers -- especially in Austin where the popularity of condos is rapidly on the rise -- is how much individual buildings charge in monthly condo fees.

Condo fees fund the daily operations and maintenance of most condo buildings. They cover security, landscaping, cleaning of common area, common area energy use, maintenance, and other key building functions. On average, our research shows, condo unit owners can expect to pay $0.42 / SF / per month or $420 in monthly condo fees for a 1,000 SF unit. For more information on total condo costs, check out our detailed posting on condo cost of ownership.

Looking at detailed MLS records on a broad range of units and through tips from buyers, we've calculated the rough fees for most of the major downtown condo buildings. The fees are universally calculated on a dollar-per-square foot basis that typically remains constant on all units throughout each building. So, condo fees are not higher for more expensive units, or units with more bedrooms, or units on higher floors compared to less desirable units of the same size in the same building.

The prices in new buildings that we have looked at are surprisingly varied -- they range from $0.28 / SF / Month to $0.64 / month -- an amazingly broad range. If anyone has numbers for other buildings, send them to us and we will add them to the list. Apprearing for the time on the list is Spring with monthly condos fees of $0.38 per square foot.

Here is our updated list of condo fees by project:

Fee by Building - - - - - $ / SF / Month
Avenue Lofts.................$0.28
Milago.......................$0.31
The Sabine...................$0.33
360..........................$0.33
Plaza Lofts..................$0.33
The Shore....................$0.36
Spring...................... $0.38
Five Fifty Five Condos.......$0.40
W Hotel & Residences.........$0.61
Four Seasons Residences......$0.61
Austonian.... . . . . . . . .$0.64
Average......................$0.42

Tags: condo fees

When buying a condo in a project that is little more than an idea on paper, a hole in the ground, or a stubby concrete shell -- it takes some imagination to put real money down. These days, this is the major challenge facing many of the downtown Austin condo sales centers as they try to sell units to prospective buyers.

To solve this problem, the Four Seasons Residences has created an unusually over-the-top video rendering of ttheir future building. Since thd buidling is little more than a 20 foot tall concrete shell supported by wood planks, the video does an amazing job of capturing the experience of the new buidling.

Here it is:



For reference, here is what the Four Seasons Residences looks like today:

Tags: four seasons

With the opening of Milago, the Shore, and 360 over the last year or two, a few more kids have moved into downtown condos with their parents. This is great news for downtown diversity, given that -- amazingly enough -- almost no kids lived downtown prior to the recent wave of development.

In fact, the 2000 Census numbers are shocking in this regard. According to the government, 3,713 of 3,855 downtown residents (zip code 78701)in 2000 were adults 18 or over. That means that only 142 children representing 3.7% of the population lived downtown. Of this group, 46 were under 5 and the remaining 96 were between 6 and 17.

With only 3.7% of the population under 18, downtown Austin looks very different than the rest of the city where 22.5% of the population is under 18 and also very different from the U.S. at large where 25.7% of the population is under 18.

Why so few kids? There are a few reasons:

- Obviously, families with kids are avoiding living downtown. Downtown demographics show that a very large percentage of the downtown population is under 30 or over 50, and the average household size is an unusually low 1.49 -- significantly below the average family size of 2.59 in New York City. There are many singles downtown, and not that many married couples.

- Large apartments and condos are very expensive. For families who want 3 or more bedrooms, prices start well over $500k.

- The downtown schools are not as good as the top Austin suburban schools - especially in areas of the city with home prices as high as those downtown.

- There are limited amenities for children. Other than the Dell Children’s Museum and a playground at Whole Foods, the lack of kids downtown has meant a lack of parks and playgrounds for kids. For families who want other kids on the block, the lack of kids downtown discourages other families with kids from moving downtown.

As downtown evolves and the population grows, hopefully downtown will become more inclusive of families and children. Otherwise, the downtown population will inevitably be transatory, as young single marry and move back to the suburbs.

Tags: downtown demographics, market analysis