W Condo Owners Exempted from Evacuation

Yesterday, W Austin hotel guests were abruptly evacuated and the hotel was indefinitely closed as balcony glass fell to street for the third time in three weeks.

While hotel guests were forced to evacuate and relocate to another hotel, some condo owners still remain in the building. As owners, the residents have the choice as to whether they stay in the building or relocate until the issue is resolved. Owners who choose to stay in the building during the repair period will not have access to their balconies.

W Austin Media Statement on Buiding Closure

W Austin Media Statement by Beau Armstrong, CEO Stratus Properties:

Today as you know, another glass balcony panel at the W Austin building shattered in place and fell, breaking two panels directly below, and sending glass into the pool area, which was closed. The entire team here at the W couldn’t be more devastated that this has occurred, but unfortunately after consulting with numerous experts we still do not know why this has happened.

So here’s what we’re doing. We are replacing every piece of balcony glass on the building. To do this safely we are working with the City to:

1.     Shut down several lanes of traffic around 3 sides of the building. This will mean some delays on Lavaca, Third and Guadalupe until the panels on those sides of the building can be removed. We apologize for any inconvenience but our first priority is public safety.

2.     Close the sidewalks entirely around the building until protective pedestrian walkways are installed.
We are also working to relocate current and future hotel guests, and closing the hotel until further notice. We’d like to thank our local hotel partners in advance for welcoming our guests and helping us during this difficult time.

We have experts and the City of Austin on site to ensure this work is done safely and as expeditiously as possible. Safety is our top priority.

Again, the entire team is devastated by these incidents, and we apologize to our hotel guests, our residents, our neighbors, and to the City. We will make this right.

W Austin Evacuated and Closed After Glass Falls to Street

The W Austin was abruptly evacuated and closed today as glass fell to street for the third time in three weeks.

The glass fell from the South side of the building just one day after three panels dropped to the street. Two weeks ago a pair of panels feel to the pool area while guests were present.

Luckily, nobody has been injured in the incident. The developers have already announced plans to replace almost 1,000 glass panels on the building's balconies.

Now, the sidewalk is closed and guarded as crews clean shards of glass from the perimeter of the building. The developer has not yet announced plans and timeline to fully address the issue and to reopen the hotel.

New 50-Story Modern Hotel Proposed for downtown, Battle with Marriott Begins

Last week, we reported that 1,000+ room Congress Avenue Marriott was back on-track. The project has been highly unpopular: the architecture is bad, the building lacks clear plans for ground floor retail, and the initial project resulted in the demolition of popular business such as Las Manitas. The building risks draining the life from a key downtown block connecting the 2nd street district to the convention district and 6th street on the East side of Congress. The developers caused additional controversy last week by requesting the waiver of more than $4 million in city fees to build the project.

The city needs a big new hotel to lure convention business and this has given the Marriott developers leverage as the only big budget project on the blocks. That is -- until now. This week, a San Diego development firm announced plans to build a 50-story 1,000 room hotel on the other side of the convention center.

The newly proposed project on Waller Creek provides a great alternative for the City: the architecture is interesting, the block is the ideal site for a large hotel between the convention center and I35. The developers are not aggressively pushing for fee relief from the City. The hotel would be the second tallest building in Austin after the Austonian.

New Waller Creek Hotel Rendering

Here is a summary from the Statesman:

"A San Diego hotel developer plans to build a $350 million hotel with more than 50 stories and 1,035 rooms east of the Austin Convention Center. The hotel would be built on land now used for parking at the northeast corner of Red River and Cesar Chavez streets, near Waller Creek.

Manchester Texas Financial Group could find itself in competition with White Lodging Services Corp., which plans a 1,003-room Marriott Marquis hotel on Congress Avenue between Second and Third streets.

It's unclear whether Austin could support two more convention-size hotels, in addition to the 800-room Hilton Austin, so the developers could be in a race to see who can break ground first.

Manchester Texas would develop the hotel. Its parent, San Diego-based Manchester Financial Group, built the Manchester Grand Hyatt and the Marriott Hotel and Marina in San Diego, high-rise hotels on San Diego Bay.

The Austin project would include 115,000 square feet of meeting and exhibit space, along with two restaurants and retail space.

Douglas Manchester, founder and chairman of Manchester Financial Group, said Friday that the project has been going "at a pretty fast speed" and that he anticipates starting construction in the next 12 months. The project would take at least 18 to 24 months to build, he said. He said Manchester Financial can put the required equity into the project and attract the loans to complete it."

Uh oh: The Dreaded 1,003 Room Downtown Marriott Might be Built

Almost a year ago to the day, the Austin City Council enacted a zoning change and turned over a public alley in the most effort to lure a major convention hotel to Block 18 -- the Congress Avenue block that used to house Las Manitas and which was at one point going to be taken over by a very large Marriott hotel. A year ago it seemed the unpopular project was dead forever, now it is reported that the 30-story hotel project across from the Austonian is likely to start construction next year.

The Congress Avenue Marriott -- a 1,003 room hotel complex on 2nd and Congress avenue -- was one of the most controversial, and one of the least popular downtown projects when originally proposed. The project is best known for displacing Las Manitas and other local businesses. Before being cancelled, the last two versions of the project were criticized for bland institutional architecture and a lack of ground-floor retail on a key block connecting the convention center area to the second street district. The original plan for the project included 1,000 rooms across 3 separate Marriott-branded hotels in one convoluted multi-faceted building. The second version of the project included two hotels in one building. Version 3.0 included just one Marriott hotel with 1,000 rooms. The budget at one point reached $250 million before the project was shelved.

Now the project is back. If the city agrees to waive $4.3 million in fees, White Lodging Services Corp. plans to begin the design and engineering process for the project almost immediately. Once completed, the 27-30 story block wide tower would be the largest hotel in Austin.

The Downtown Marriott as Originally Proposed
New Downtown Austin Marriott on Congress Avenue

The sad thing is that the city does badly need downtown hotel rooms and another large convention center hotel. The issue with the Marriott project as previously proposed is that -- unlike the highly popular W hotel -- the hotel is monolithic, architecturally uninteresting, lacks retail, fails to engage the surrounding streets, and brings no community venues or resources. It comes across as a pure profit play subsidized by tax payers and without regard for the advancement off the neighborhood.

Downtown "Startup District" Proposed

Technology startups have played an important role in driving the Austin economy. Home-grown companies like Tivoli, HomeAway, and Solarwinds have become major local employers.

In an effort to build a stronger community around startups with the hope of nurturing more entrepreneurs to success, the Statesman reports that "Austin may soon get a downtown startup district similar to those that have thrived in Silicon Valley and Boston."

According to the Statesman:

"The Greater Austin Chamber of Commerce is launching an effort to create Austin Live, a downtown work space that could serve as a home base for entrepreneurs and very early stage startups.

A search is under way for 10,000 square feet of space for the initiative, said Gene Austin , CEO of Convio Inc. and chairman of the chamber's Greater Austin Technology Partnership, which is overseeing the project.

Austin Live would feature an open floor plan and a coffeehouse environment, and it would provide a place for people to plug in their laptops and exchange ideas.

"The idea is to give entrepreneurs a better runway to get out of the tough stages of going from an idea to a real business," Austin said. "It's hard to make connections when you're working from your garage. We'd like this to become a magnet for funding. Hopefully, it will become a centerpiece for a much stronger tech ecosystem."

Chamber leaders are talking with other startup districts about playing a role in Austin Live. It's possible that instead of charging for space, service providers such as legal and accounting firms or venture capital firms could underwrite expenses, organizers said.

Many details are not yet decided, including who would operate the space and recruit tenants, and how it would be funded. The chamber's role now is helping find the location."

Wow! Strong April & May MLS Condo Sales & Price Appreciation

We've updated the AustinTowers | urbanspace Downtown Austin Condo Market Index for April and May, 2011and the results are very, very good. With 42 MLS sales during the two month period (and as many as 40 non-MLS sales in May alone), our twelve month tracking index showed it's highest average sales price ever: $368,929. The new record was the result of both price appreciation and a shift in mix to higher-priced units.

In April, 18 units sold for an average price of $387,508 -- a 29% increase in sales, 32% increase in average price, a 4% increase in $/SF and a 23% decrease in average days on market. While May sales volumes were level with last year, sales prices increases by 35%, $/SF by 15%, and average days on market dropped by 49% to 60-days. Overall, the units sold this year were newer, bigger, and more expensive than the units transacting a year ago.

April 2011 Condo Sales
Month
Sales
Avg. Price
$/SF
Avg SF
Avg Year
% Ask
ADOM
Apr-10

14

$294,263

$273
1,061
1985
96%
128

Apr-11

18

$387,508

$284
1,302
1989
96%
98

Change

29%

32%

4%
23%
4.00
0%
-23%

May 2011 Condo Sales

Month

Sales
Avg. Price
$/SF
Avg SF
Avg Year
% Ask
ADOM
May-10

24

$258,967

$285
934
1976
96%
118

May-11

24

$349,329

$327
1,041
2000
97%
60

Change

0%

35%

15%
11%
24.00
1%
-49%

During the two month period, sales prices ranged from $100K to $1.2M. 7 units sold for less than $200K, 31 sold for $200K - $500K, 2 from $500K to $1M, and 2 units for more than $1M. The two units that sold for more than $1M were both in the Nokonah. It is interesting to note that more than 90% of sales were for less than $500K and that the big dollar transactions are almost all happening off the MLS in new projects like the Austonian, W, and Four Seasons.

The most units sold were in 360 -- the largest downtown Austin condo project and one of the most desirable -- with 12 units selling for an average of $392 / square foot. After 360, five buildings each saw 3 sales during the two month period: Sabine, Nokonah, Greenwood, 904 West Ave, and Milago.

As usual, private sales -- which are not reflected in the MLS data -- continued to close at Spring, Four Seasons, the W, and the Austonian. April and May are the beginning of the peak selling months and, so far, the trend looks good. Year-to-date, sales are up to 75 units over 71 last year thanks to a strong April.

See the full index here.


DAB Reporting 40 New Building Closings in May

The Downtown Austin Blog is reporting that an amazing 40 units closed in May in the major new construction downtown projects.

Here are the reported May closings by building:

W Residences: 15 in May (Est. 51 now closed)
Barton Place: 12 in May (Est. 90 now closed)
Austonian: 4 in May (Est. 60 now closed)
Spring: 4 in May (Est. 208 now closed)
904 West Ave: 3 in May (Est. 6 now closed)
Four Seasons Residences: 2 in May (Est. 68 Closed)

This is an amazing pace of sales and shows renewed strength in the downtown market. Note that the total numbers are estimated --- it's very difficult to get accurate counts from some of the buildings -- especially the Austonian.