26-Story "Congress Sliver Hotel" Approved by City Council

According to the Austin Business Journal, "Austin City Council on Thursday approved special zoning to allow the transformation of a historic Congress Avenue building into a boutique hotel."

Under the new plans, developers will build a 26-story 130 room hotel and restaurant on top of a small 120-year-old Congress Avenue building. The project could begin construction as early as this summer and may take 18 months to complete. As the only hotel on Congress Avenue, the project will bring additional people and life to the most important downtown street.

Renderings of the new hotel tower proposed for 416 Congress Avenue
416_Congress.pdf_page_17_of_26-20110118-135014

As we have reported, the boutique hotel will integrate the 1893 Romanesque facade into a new 26-story tower designed by prominent Austin architect Dick Clark. The building is essentially a "sliver tower" -- an extremely small footprint tall building designed to fit over a tiny lot occupied b a small building. In this case, the average floor plate will be just 3,500 square feet or 50 by 70 feet. Other cities, such as New York City, prohibit the construction of these sorts of towers. For Austin, which is eager to expand downtown development, to add downtown hotel capacty, and to revitalize Congress Avenue, the project will likely be attractive.

Austin has a number of successful boutique hotels such as the Hotel San Jose on South Congress. 416 Congress will be the first downtown boutique hotel and an important development for Congress Avenue. Last year, plans were cancelled for an unpopular Mariott mega hotel on Second and Congress.

The new hotel will be built on this site: 416 Congress Avenue
Congress Avenue Austin Boutique Hotel

Additional Schematics show how the new structure will integrate the existing facade
416_Congress.pdf_page_24_of_26-20110118-134932


Whitley Printing Site Under Contract for Possible Apartment Project

According to the Statesman, the former Whitley Printing Co. building site on third between Brazos and San Jacinto is under contract to Riverside Resources which is evaluating plans to build an apartment complex on the site.

Screen shot 2011-03-24 at 10.38.45 PM

The Whitely site is one of the last remaining prime downtown building sites. The lot is on a key downtown block and is free of capital view corridor restrictions. The lot had been previously optioned for the first iteration of 21c, a 44-story hotel and condo project that was later relocated and then put on hold.

While condo projects are currently very difficult to finance, the apartment market is Austin is very strong. Existing downtown projects are almost fully occupied and rents are rapidly rising.

Does Downtown Feel Crowded? SXSW = 13K People, F1 Racing = 300K People

St. Patrick's Day 2011 may have been the most crowded that I have ever seen downtown. With SXSW music in full force, a packed free concert for the Strokes at Auditorium Shores, and a steady stream of locals headed downtown to celebrate St. Patrick's Day, downtown was absolutely crazy.

This year's SXSW music festival packed downtown with 13,000 paid attendees. The interactive festival attracted just over 19,000 paid attendees. In 2012, it's expected the first Formula One race in Austin could attract as many as 300,000 attendees.

If you think downtown was crowded this week, what will happen when 20x the number of people appear at one place for the first race? While good for the economy, the traffic will likely set new Austin records.

Another issue remains hotel rooms. Today, the City has 29,378 hotel rooms in the City Limits. To hold SXSW attendees, the festival organizers contracted with 73 hotels. When they were full, they scrambled to find another 400+ rooms in the region.

While crazy, downtown was also the most alive that I have ever seen it. It provided a clear vision of the life that a few thousand more downtown residents could bring to downtown, and the inevitable restaurants, retails, bars, and offices that would follow to support the new crowds. As people continue to flock to the region and Austin events get bigger and bigger, there will inevitably be more busy nights downtown.

First W Austin Condo Sale Prices Hit MLS

As condos in the W Residences begin to close, the first two units have hit the MLS. For buyers looking at the W, this is one of the first public signals of the building's market value. The units were:

23rd Floor
1,169 Square Feet
1 Bedroom / 2.5 Baths
$570,984
$488 / SF

22nd Floor
3,498 Square Feet
3 Bedroom / 3.5 Baths
$2,035.000
$582 / SF

In addition, a second Austonian unit also appeared on the MLS list of February sales:

23rd Floors
1,609 Square Feet
2 Bedroom / 2.5 Baths
$950,000
$590 / SF

Exclusive: Condo Sales Soar in February

There is lots of evidence that the Austin real estate market should be improving: inbound migration rates are extraordinarily high. Job growth is back. Inventory is declining. Rental rates are soaring. February's sales provide the first evidence that the market may be improving.

We've updated the AustinTowers | urbanspace Downtown Austin Condo Market Index for January and February, 2011. In January, the market was flat -- 6 units were sold at a slightly higher average price but a slightly lower price per square foot. Average days on market was very long.

January 2011 MLS Downtown Condo Sales Statistics
Month
Sales
Avg. Price
$/SF
Avg SF
Avg Year
% Ask
ADOM
Jan-10

6

$274,547

$291
953
2005
96%
127

Jan-11

6

$289,650

$265
1,086
1989
98%
139

Change

0%

6%

-9%
14%
-16.00
2%
9%

February 2011 MLS Downtown Condo Sales Statistics

Month

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

8

$291,938

$292
1,002
1979
94%
50

Feb-11

14

$460,327

$353
1,128
1996
97%
143

Change

75%

58%

21%
13%
17.00
3%
186%

In February, however, sales increased dramatically as units transacted soared by 75% from 8 to 14 while absolute prices and $/SF increased substantially. In general, the units were newer and bigger than prior year sales. The results included two sales at the W Residences ($582/SF & $488/SF) and one at the Austonian ($590/SF) which helped to boost the averages. In addition, four units sold at 360, two at Milago, and one at the Shore as well as one each in four older buildings: Cambridge, Greenwood Towers, Westgate, and Penthouse condos.

The February data shows how diverse the inventory has become: with sales prices ranging from $91,500 to $2,035,000, $/SF ranging from $189 to $590 and size ranging from 485 SF to 3,498 SF. Half the units sold were under $350K and half were over $350K. Four units sold for less than $200K and one unit sold for more than $1 million.

As usual, private sales -- which are not reflected in the MLS data -- continued to close at Spring, Four Seasons, the W, and the Austonian. January and February are typically slow months -- we'll watch closely as March results provide a clearer picture of the direction of the downtown Austin condo market -- and see if the acceleration is more than a one month trend.

See the full index here. (Note: original story corrected with updated data)

Report: Downtown Rents Soaring

We're hearing reports of soaring rents in high-end downtown Austin rental buildings like the Monarch, Ashton, and AMLI. In one case, a tenant's recent renewal resulted in a 30% increase in the market rate and the elimination of concessions. In total, this meant a rent increase of more than 50%.

While downtown rental properties struggled to find tenants a few years ago, all of the major buildings are now full. Vacated units are re-leased with amazing speed -- turnovers now average just a few days between tenants. With many new residents and few new units, supply and demand is pushing rents higher very quickly.

With no new projects in site, rents are likely to continue to in crease as new people migrate to Austin and financing for condo buyers remains difficult to obtain.