Another downtown Austin condo building has begun it's unstoppable climb to the sky. Over the last few weeks, construction has begun on the Spring condo development in the Austin Market District, just south of Whole Foods. The $70 million project will be 42-stories high. The 260-unit project at 3rd & Bowie will have units starting in the low $200s.
Here are some new notes on the project from the staff:
Spring is designed by Foad Rafii, a Vancouver architect, using design principles that maximize the amount of usable space on each floor. Panoramic views of the city, wall-to-wall glass and concrete "point towers," so called because a plate - the footprint of one floor - is limited to 6,800 square feet. Compare this to Austin, where many of our recent residential buildings are thick and squat and use land inefficiently. Plans call for ground-level retail and 248 units, priced from $235,000 (600 SF) to $950,000 (1,720 SF), with only four to eight units per floor. This will be a stunning piece of architecture, and it will help accommodate the need for urban living space in the heart of Austin.Larry Warshaw, who is developing the project along with Perry Lorenz, Robert Barnstone and Diana Zuniga. Lorenz and Barnstone were partners in the Nokonah condominiums on North Lamar Boulevard and West Ninth Street. Robert Barnstone also served on the Austin City Council from 1988 to 1990. Warshaw and Lorenz co-developed the Pedernales Lofts condominiums on East Sixth Street. Zuniga, a well-known broker, also is a principal in the partnership that sold the land.
And of course, AT has a full profile. And here is a picture:
As new downtown Austin condo projects are announced, we add them to AustinTowers. Over the last week we've added three full new profiles for recently announced projects. This brings the total number of projects covered by AustinTowers to 36!
The new profiles are:
1155 Barton Springs
Sabine on 5th
And of course, they can all be found in either the New Condo Project Gallery or the Completed Condo Project Gallery. Please contact us to let us know if we have missed anything!
In 1981, massive amounts of rain caused deadly and damaging flooding on Shoal Creek. According to experts, a similar flood could occur today on Waller Creek which passes through downtown just West of I-35. If this were to happen, there could be significant damage across more than 1 million square feet of prime downtown real estate bordering the waller creek flood plain. As recently as January, heavy rains have led to dangerous flooding on Waller Creek.
Recognizing this risk, developers and other downtown factions have been advocating for an elaborate downtown tunnel that would carry floodwaters 60-feet under the current creek banks, essentially eliminating the risk of a downtown flood on Waller Creek. In addition to lowering the risk of development on some prime lots, the City hopes that the tunnel will pen the way to the development of a San Antonio sytle Riverwalk with gondolas, restaurants, stores, and lots of free-spending tourists. Today, the City Council took the first step to make this happen.
Here is the summary from News 8 Austin:
Plans for the Waller Creek tunnel project are moving along. The Austin City Council unanimously approved the creation of the Waller Creek Tax-Increment Financing District at Thursday night's meeting.The decision allows for the redrawing of district lines so that political entities can fund the project. In this case, it allows for the city of Austin and Travis County to finance the project.The Waller Creek tunnel would carry water from the creek starting at Waterloo Park down to Town Lake and take out more than 1 million square feet of prime downtown land from the floodplain.Development plans also include beautification projects for Waterloo and Palm parks.Thursday's city council decision makes way to appoint the tax-increment financing district board, which will ultimately approve the final financing plan. The cost is now pushing $125 million.
While expensive, this project makes sense. The city wants developers to spend billions of dollars investing in downtown. For this to happen, the city needs to invest in infrastructure to support development and remove the risk of downtown flooding. The idea of a pedestrian-friendly riverwalk is a nice idea that would dramatically improve the somewhat dreary corridor on the west end of downtown. While this project will take years to complete, today's council decision is a step in the right direction.
New plans were announced today for the most controversial project in downtown Austin: the 1,000+ room $250 million Marriott superplex on 2nd and Congress. The project, best known for displacing La Manitas, has been reconfigured to include higher-end brand hotels and fewer, taller "buildings". As far as we can tell, the 31-story project still does not include any ground floor retail. While the project has an opportunity to extend the thriving 2nd street district towards the convention center and the new 21c Austin Condos and Museum, Marriott seems more interested in developing another large, generic, building on a prime downtown lot.
Here's a summary from today's Statesman:
White Lodging, which would develop, own and operate the hotels under a long-term agreement with Marriott International, still plans a 1,000-room project, but the new plans have two towers instead of three.New plans call for a 31-story tower along Brazos Street with 850 guest rooms and an 11-story hotel along Congress Avenue with 150 rooms.The larger Marriott will be a convention center hotel, and the smaller one will be a J.W. Marriott, the chain's upscale brand. White Lodging hopes to break ground in early 2008 and open the hotels in 2010. . . Initial plans called for a 26-story Marriott convention center hotel with 650 rooms; an 11-story upscale Renaissance Hotel with 200 rooms; and a 15-story Springhill Suites with 150 rooms.
If this project had an interesting architect, ground floor retail, and a way to incorporate Las Manitas it might be a positive addition to downtown. While the 1,000 rooms will provide an important boost to the convention center and the Austin economy, the planned project is uninspiring and potentially disruptive to a prime pedestrian corridor on one of the most important downtown blocks.
Interest rates keep going up. Sub-prime lending has been cut back. The rest of the country is watching housing values drop. In Austin, however, it's a very different story.
May real estate statistics were released today and the numbers show a surprisingly strong market. According to the Office of Federal Housing Enterprise Oversight, housing prices in Austin are up 10% so far this year. According to MLS statistics released by the Austin Board of Realtors, the average number of days on market in May was just 55 days and the median sales price was $183K.
As we've mentioned before, these numbers provide a context for looking at the Austin condo market without providing the complete picture: many condo projects are privately marketed so that the units never hit the MLS and aren't included in the monthly statistics.
How big is the market for million dollar condos in downtown Austin? Developers are betting that hundreds of buyers are willing to invest $1 million or more on high end units in projects like the Austonian, 21c, the Four Seasons Residences, and in the condos at the W hotel.
To get a sense for the competition for million dollar homes and condos in the Austin market, I scoured current MLS listings for homes and condos currently on the market with asking prices above $1 million.
Surprisingly, there is an amazing amount of single family home inventory priced over $1 million:
Current MLS Inventory by Listing Price
$1M + -- 572 Homes
$2M+ -- 171 Homes
$3M + -- 70 Homes
$4M+ -- 29 Homes
$5M+ -- 12 Homes
$10M + -- 1 Home
And how about the Austin condo market? Currently, there are just 9 condos priced over $1 million in all of Austin. While the MLS numbers include projects that are being marketed directly without an MLS listing, the number is still amazingly low. While the number of houses in Austin with a Tax appraisal over $1 million has grown from 1,602 to 2,981 between 2005 and 2007, the million dollar market is the fastest growing segment of the Austin real estate market. While it remains to be seen if downtown Austin demand grows proportionally, it seems quite likely.
It's no secret that housing prices are strongly correlated with employment growth. Demand for homes increases when jobs are created and this demand pushes housing prices up. It's no the only factor -- interest rates are very important as well. But, all things created equal, when new jobs come to town, housing prices go up.
Today, the Texas Workforce Employment released the latest unemployment statistics for the state. The news: unemployment dropped to 4.1%. This is very low. In fact, it's lower than the peak of the dot com boom. It's also lower than the peak of the wall street boom of the early 90's. It's even lower than the peak of the Texas oil boom of the 1980s. Believe it or not, the current rate of Texas unemployment is the lowest reading since 1976. And in Austin, the unemployment rate is 3.2%: nearly a full point lower than the rest of the state.
Over the last year, 240,000 new jobs were created in Texas. If interest rates were lower, price appreciation would likely be very strong. With the uncertainty around rates and weak appreciation around the rest of the country, the strong Texas job numbers should help support continued market appreciation throughout the rest of the year.
A lot of money is being spent on downtown development -- more than $2 billion in condo projects alone at last count. And while it is technically outside of downtown, it seems another $750 million mixed use development is about to break ground. The project will develop 2.75 million square feet across 22 prime central acres near downtown Austin.
The project, East Avenue, will be on the former campus of Concordia University just North of the University of Texas on the West side of I-35. The goal is a new mixed-use "downtown" with residential, commercial, retail, parks, and a hotel. Here is the summary from the Austin Business Journal:
With a three to five-year build-out timeframe, the project will eventually include 1,450 residential units, 600,000 square feet of office space, 325,000 square feet of retail and a 250-room luxury hotel. Pocket parks, public spaces and an interconnected network of walkways will also be included in the layout of East Avenue, which developer Andy Sarwal hopes will become an entertainment and shopping hub, providing a dense, urban-living alternative to downtown.
As we have asked before, how many downtowns does one city need? It's hard to tell what is happening: the optimistic view is that responsible developers are working hard to create model mini-communities that represent a new sort of urbanism. I hope this is true -- and that Austin is becoming a leader in a new sort of urban or quasi-urban growth. Clearly, it's too early to know how these projects will fare --- my sense with all of these (the Domain, The Triangle, etc.) is that they don't really become interesting until after a few phases of development when they reach a scale that provides a critical mass for people to live, work, shop, and have fun. So far, only the Domain seems on track to reach this objective.
The following images, courtesy of East Avenue, show the site and renderings of the new neighborhood:
Here are some of the details from today's Statesman:
Another dramatic change could be on the horizon for Austin's skyline, as plans take shape for a 44-story tower that would combine luxury condos and a hotel that doubles as a modern art museum.Developers today will announce a $200 million project at Third and Brazos streets that is to include a 21c Museum Hotel, the second such project following the successful opening of one last year in Louisville, Ky. The project would have 209 guest rooms and 200 condos as well as a world-class contemporary art museum that would offer free admission year-round to allow the public to experience original art in a nontraditional setting.
The investment in the project is truly staggering: $200 million for 779,000 square feet. It's nice that the developers are investing first for underground parking, an expensive rarity in Austin, as well as for the museum which will add another cultural destination downtown while providing the project a creative identity. The project is being constructed at 3rd and Brazos on the current site of the Whitley printing company -- a windowless black stucco one floor industrial building that has had "future condo site" written all over it. The project will require variances for the large size and is expected to break ground in 2008 with a planned completion in 2010.
The project architects include Deborah Berke & Partners, a very well respected boutique, modern New York firm as well as Goody Clancy Architecture, a national firm based in Boston. Susman Tisdale Gayle, a local firm retained to assist with many of the large Austin projects, will also be involved.
The renderings show a very attractive project:
What's the bottom line? First, it's nice to see developers who could choose any city in the world choose Austin for such a unique $200 million project. This concept, more than most, will make a significant positive contribution to the downtown Austin environment. It will also be a key project in an important part of the city: the area between Congress and the Convention Center, between Sixth and the lake. While the Second Street District and the contiguous Warehouse District are becoming the heart of downtown, this area is the prime connective tissue to historic Sixth Street, the important Convention Center District, and the rest of downtown. The area is threatened by the terrible Marriott block between second and third, congress and Brazos where a huge retail-less hotel monolith will break the westward pedestrian traffic flow from the 2nd Street district. This project will help balance the area, providing a hub for new restaurants, bars, and shops and hopefully creating a bridge between these important downtown neighborhoods.
While pricing has not been revealed, the developers have implied that the project will compete on the upper-end of the market with the Austonian and the Four Seasons condo project. As this market for high-end condos has not previously existed in Austin, it's too early to tell how the project will fare financially. However, the unique boutique hotel will certainly be a welcome addition just a block from the convention center.
As always, the full AustinTowers profile can be found here!
If you buy a house in central Austin, the odds are that it is different -- in one way or another -- from every other house in central Austin. When it comes time to sell your unique house, you may get lucky and sell for more than it's worth, or you may be unlucky and have it sit on the market for a long time. Setting a price is a key variable, but pricing a unique house is as much art as science.
The issue is that the value of unique single family homes is subjective and highly personal. Every house, every street, and every aesthetic is valued differently. The single family home market, as one would expect, is very different from the downtown austin condo market.
Every high-rise condo project has a large number -- sometimes hundreds -- of interchangeable commodity-like units. Unit 16B is essentially identical to unit 17B. The result is a much more efficient resale market. When it comes time to sell a downtown condo, there will likely be similar units on the market. If they are cheaper, they will sell faster. If they are more expensive, the may never sell at all.
While the floor (the higher the better, stay away from the ground floor) matters and in some buildings the view can vary greatly from side to side, the effect on value is not as dramatic as one might think. Our ongoing analysis of Nokonah values and appreciation confirms this: units on floor 11, the top floor, are valued at just 11% more than units on the second floor. Buyers seem to pick a building first, and then look for the right unit weighing size and price. This approach leaves very little room for creative pricing.
Yet, it's amazing how differently sellers price similar units. The AustinTowers listings pages provide a few great examples of this. For example, there are two units currently for sale in the Nokonah: a 670 SF 1/1 for $450K and a 1,225 SF 2/2 for $550K -- the smaller unit is almost certainly overpriced.
Because it so easy to compare prices, downtown condo values will be efficiently set by the market. The building will make a huge difference, but actual prices will be set by your neighbors. This has some benefits and drawbacks. On the positive side, accurate comparables make it easy to set the right price and correctly priced units should sell quickly. On the downside, pricing may fluctuate more widely with supply and demand: when there are lots of people selling at the same time, it's likely that prices will drop. And there is very little chance to get lucky and sell your unit for above market value --- if a unit doesn't sell, the most likely reason is that it is overpriced.
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 $0.34 / SF / per month or $340 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 more than 30 units on the market today, we've calculated the rough fees for the major downtown condo buildings that currently have units on the market. Almost universally, the fees seem to be calculated on a dollar-per-square foot basis that seems to remain relatively 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.
In addition, the prices in the six new buildings that we have looked at our surprisingly constant -- they vary from $0.28 / SF / Month to $0.40 / month -- an amazingly tight range. If anyone has numbers for other buildings, send them to us and we will add them to the list.
Here are the building-by-building statistics:
|Fee by Building||$ / SF / Month|
Five Fifty Five Condos
May was a great third month for AustinTowers -- with more than 1,200 visitors in just 31-days, it has been very exciting to see interest in the site grow so quickly. I am particularly thankful to the large number of readers who have completed the survey or sent thoughts, ideas, and feedback via email. It is this data and feedback which has led to many of the changes in the site. If you have thoughts that you haven't shared, we hope that you will send us a note!
Thank you for reading the site and sharing your thoughts and ideas!
According to the developer, rents are expected to range from $1,330 to $6,930 (average rent will be $2,298) for units that range in size from 659 square feet to 2,876 square feet. I'm not sure how many people are looking for a $7K / month for a 2,900SF rental unit, but I am very curious to find out.
Here is the summary from the Statesman:
Construction has started on Legacy@Town Lake, a 31-story luxury apartment tower that is the latest high-rise to break ground amid downtown Austin's residential building boom. . . Legacy Partners Residential Development Inc., based in Foster City, Calif., is building the 187-unit project at Rainey and Cummings streets. . . Construction has started on Legacy@Town Lake, a 31-story luxury apartment tower that is the latest high-rise to break ground amid downtown Austin's residential building boom. Legacy Partners Residential Development Inc., based in Foster City, Calif., is building the 187-unit project at Rainey and Cummings streets. . . Legacy@Town Lake is due to open in September 2008, said Spencer Stuart Jr., a senior vice president and partner. . . The project will include a 265-car garage. . . Other apartment projects under construction downtown include AMLI Residential Properties Trust's 18-story, 232-unit complex on Second Street between Guadalupe and San Antonio streets, and Phoenix Property Co.'s complex at the former Goodwill site near West Fifth Street and North Lamar Boulevard. In addition, several condominium towers are under way, with scores more planned in and around downtown.
How does it look? Needless to say, the rental projects in Austin are rarely as architecturally interesting as the major condo projects. This project is no exception. In fact, it almost looks as if the garage is falling over.