According to the Austonian, after 640 days of construction, tonight The Austonian will become the tallest structure in Austin at 571 feet. The next milestone comes in December when The Austonian's glass crown is installed. The 56-story building will reach 683 feet at that point making it the tallest residential building in the western United States. Amazingly -- for those who have looked up at the tower recently -- the building still has 112 feet to go. The picture below shows the pouring of the 51st floor. When completed, the tower will be 56 stories tall.

Tags: news

The Austonian is already the tallest building in Austin. It will have great views and a perfect location on second and Congress.While the project is somewhat pretentious, the Austonian team is working hard to differentiate the project through services. In their latest update, the project team has announced a unique catalog of services and amenities for hosting and entertaining guests.

First, formal dinners may be arranged in home or at the 55th-floor Austonian Club, which offers 360-degree views of downtown Austin, the Colorado River and the Texas Hill Country from the tallest building in the city. The Austonian Club has a private dining room for smaller affairs and a flexible space accommodating up to 200 people.

Rendering: The Austonian Club


In addition, there are additional outdoor entertaining options on the 10th floor Lawn, including outdoor kitchens, swanky private cabanas with flat-screen televisions and in-pool lounging areas. Indoor entertainment-geared amenities on the 10th floor include a billiard and game room outfitted and a 12-seat screening room.

Rendering: Austonian Cabana & Pool


One of the great things about high-end downtown projects is that many include rooms for overnight guests. This is huge: it allows residents to purchase smaller units but to still host guests when they need to. In the case of the Austonian, four guest suites on the 10th floor have feature custom bedding, Egyptian cotton sheets, a flat-panel television, a refrigerator and both wired and wireless Internet access. Four separate private terraces offer views of the city and nearby Lady Bird Lake. The guest suites, like the other residences of the building, are supported by a team of Austonian Assistants providing personal service 24 hours a day, seven days a week. Suites may be reserved in advance; the only fee is a per-suite cleaning fee.

I am sure there will be more to come as the building nears completion . . .

Austonian Construction Progress

Tags: news, austonian

Over the last 8 weeks, the downtown condo market has taken a dramatic positive turn. After 20 tough months, buyers have begun snapping up units at a surprisingly strong pace.

While the MLS data shows 11 units having sold during May -- 2 less than last year -- the real story is much more dramatic. Since May 1, bargain hunters have put more than 40 units under contract at the Shore and another 20 in the Brazos Place auction. In addition, pre-sale units continue to move at the W and Spring. In fact, inventory numbers have dropped over the last month. If this rate continues, there could be a shortage of mid-price inventory by the end of the year.

As for the May MLS data, which does not include the Brazos Place transactions and does not yet include the Shore contracts, there was a 1% year-over-year increase in price per square foot and a 31% decrease in average days on market.

One-Month Sales Report
Month	Sales	Avg. Price	$/SF	Avg SF	Avg Year	% Ask	ADOM
May-08	13	$297,792	$304	995	1969	95%	91
May-09	11	$347,045	$308	1,150	1989	96%	63
Change	-15%	17%	1%	16%	20.91	1%	-31%

May sales represented a surprisingly broad set of transactions with sales in Austin City Lofts, the Brown Building, Cambridge Condos, Milago, the Nokonah, Railyard condos, and three units in 360. The average price per square foot for the May 360 units was $360 per square foot.

While the 1-month data is inevitably a small sample, our 12-month rolling index echoes the trend, showing the lowest Average Days on Market reading of the year.

See the full AustinTowers | urbanspace Downtown Condo Market Index -- including the monthly sales and inventory reports and the 12-month rolling index here.

 

Tags: mls statistics, news

Some condo projects are better than others. After reading a story in the New York Times, I can safely say that the worst condo project in the country is not in Austin.

For the bargain price of $1,300 per square foot, you could own a piece of the Sheffield57, a 50-story condo conversion project on the west side of manhattan. At more than $400m, the original building purchase (prior to conversion) is supposedly the most expensive residential building sale ever. With the completion partially complete, you could own a $7M unit with $6,000 in monthly taxes and fees in what may be the worst condo project in the country.

How bad can a condo project be? Here are some facts about the project:

- One of the developers is accused of siphoning off $50m in development funds for personal use

- In retaliation, another developer hit the first developer in the head with a metal ice bucket during "a rather intense business meeting". He was arrested and charged for harassment and pleaded guilty. He was sentenced to community service.

- After 2 years of marketing, only 40% of it's 597 units have been sold

- The condo owners are suing the developers

- Rental tenants (who have lived in the building since before it was converted) are suing claiming improper eviction and failure to maintain the building

- The developers are suing each other

- Unpaid contractors have placed liens against the individual units.

- The State Attorney General has halted future sales in the building

- The developers are in default on $100 million in loans

- The lenders are preparing to foreclose on the developers

- The developers failed to pay $5.4 million in common charges for the hundreds of units that they still own

- Tenants have reported severe structural defects including collapsed ceilings, extensive water leaks and damage, and asbestos contamination

While no project is perfect, Sheffield57 offers an important lesson to condo buyers. Condo projects are not always completed as marketed. The track record of the developers, their ability to meet their commitments, and the ability to deliver a quality product will determine the final value of a condo unit. While most projects turn out well, it's important to complete due diligence on the developers and commercial lenders. However, like any other speculative project, condo developments come with speculative risks that are difficult to completely eliminate.

Tags: news

In a very sad accident, three men died after scaffolding collapsed on the 11th floor of 21 Rio, a 21-story rental apartment complex rising in the West Campus neighborhood near UT.

The three men were standing on the scaffolding when part of the platform collapsed. The luxury student apartment complex is scheduled to open later this month.

Tags: news

The Episcopal Church has purchased the downtown block bounded by Seventh, Eighth, Trinity and Neches streets for $9.5 million. The national church organization plans to spend an additional $40 million to create a new complex to house its national archives.



When completed, the building will be as tall as 5 stories with 70,000 square feet of archive space, a garage, some public spaces, and limited ground floor retail. Since the block is in a capital view corridor, development is limited to no more than 75-feet. Because of the capital view restrictions, it was never a prime candidate for high-rise or condo development.

Here is a summary from the Statesman:

The Episcopal Church has bought a block in downtown Austin where it plans to build a facility to house its national archives and provide space for meetings, exhibits, research and other purposes.

The church purchased the block, now a parking lot bounded by Seventh, Eighth, Trinity and Neches streets, from Jimmy Nassour, an Austin real estate attorney. The purchase price was $9.5 million, said Mark Duffy, director of the Archives of the Episcopal Church.

The church, which borrowed against its endowment to buy the land, plans to launch a capital campaign next year to raise money to repay that loan and pay for the new facility. The cost of the project, which is in the "very preliminary" planning stages, will be almost $40 million, Duffy said.

The building probably will be five stories, with up to 70,000 square feet and a garage with some public spaces. Duffy said the start of construction is at least two years away.

In addition to archives and meeting space, the building will be a place "for Episcopalians nationally to gather and to study, reflect on and feel proud of their heritage," Duffy said.

"The idea is to build something that will be a visible presence for the Episcopal Church in the community, as well as a place where church members and the public can explore issues of vital importance to the church today," Duffy said.

Tags: news

This just in: Austin led the nation's big city job markets for the third month in a row. In fact, Austin was the ONLY large metropolitan area to add jobs between April 2008 and April 2009. With 3,400 new jobs, Austin employment grew at 0.4% during the period.

Since job growth is one of the strongest drivers of real estate values, it is a positive development for Austin's downtown condo market and for broader home sales and prices.

Here is a summary from the Statesman:

By adding 3,400 jobs, Austin was not only ranked #1 but the only metropolitan area

The Austin area was the nation’s strongest big-city job market last month, according to a new report from the Bureau of Labor Statistics.

Among the 38 metro areas with a workforce of at least 750,000, Austin was the only one that gained jobs from April 2008 to April 2009, the bureau said. It was the third month in a row that Austin had earned that distinction.

Austin added 3,400 jobs in that period, a 0.4 percent gain, during that period.

Among other technology hubs, the Silicon Valley area lost jobs at a 4.4 percent annual rate in April. Portland, Ore., was down 4.7 percent, Seattle was down 3.4 percent and Raleigh, N.C., was down 3.3 percent.

Some smaller cities also racked up gains, including Midland, up 2.2 percent, and Odessa, up 2.9 percent.

Tags: news

The shooting of 8 people last Thursday night outside a downtown nightclub was an anomaly for Austin. The terrible incident at Spiros nightclub, however, brought to light the problems that come with the vibrant alcohol-driven nightlife on sixth street and the surrounding blocks.

After the incident, the Austin Police Department released an amazing set of statistics on Spiros nightclub:

- Since 2008, the police have responded to calls at Spiros 172 times
- Since November 2007, there have been 115 known thefts within 500 feet of the club
- During the same period, there have been 47 reported burglaries within 500 feet
- There have been 25 aggravated assaults in the immediate vicinity of the club
- There have been 7 assaults on a peace officer at the club
- APD reports 95 instances of possession of controlled substances, dangerous drugs, and marijuana

While Spiros may be one of the worst offenders -- the City is now trying to shut the club down -- it is an example of the ugly side of downtown. While the live music scene is one of the City's cultural crown jewels, the best clubs are joined by more problematic venues. As in New Orleans and San Diego and Nashville, the combination of music, youth, and alcohol means that nightlife and crime often go hand in hand. That said, it is worth noting that no major downtown condo projects are in the immediate vicinity of Spiros and the worst 6th street crime.

Tags: news

Across the country, most major metropolitan areas are seeing home prices continue to drop. In fact, housing values are down 20% from their peak nationwide. Housing prices in Austin, however, never experienced the same loss of value. While inventory remains high and sales volumes have dropped -- April 2009 sales were down 33% from the peak April 2007 volume -- prices have remained amazingly stable.

Today, one major index of home values reported that Austin home prices actually increased by 2.2% in March, 2009 over the year ago period -- a very positive development for the Austin market. In the same index, nationwide prices were down by 11.5% during the same period.

Why has Austin stayed strong? There are three reasons:

(1) Austin never experienced bubble-like run up in values during 2006-2007 that many other markets experienced

(2) Austin continues to see strong net inbound migration which helps stabilize values

(3) Austin employment has remained strong. Amazingly, the most recent data shows a decrease in the local unemployment rate.

As a result, Austin continues to be one of the strongest real estate markets in the country.

Here is a summary from the Austin Business Journal:

According to First American CoreLogic’s Home Price Index, 33 states saw home prices decline at a faster rate in March. However in the major Texas cities, including the Austin-Round Rock metro area, prices increased. In the local area prices rose 2.2 percent in March compared with March 2008. That’s down slightly from the region’s February home price increase of 3.2 percent compared to the previous February.

Housing price declines are slowing in states that have seen the highest declines in the past three years, but prices are dropping faster in states that have seen only moderate decreases in that time period, the research found.

Nationally, housing prices fell 11.5 percent in March compared with the same month last year, down from an 11.7 percent annual decline in February.

The number of states with double-digit annual declines has doubled in the last year, according to the index, from seven states in March 2008 to 14 states this March.

Nevada remained the top-ranked state for annual price depreciation in March, with an average home price decline of 26 percent. California followed close behind with a housing price decline of 25 percent compared with the same month last year. Rhode Island, Florida and Arizona round out the top five.

Tags: news

Stratus Properties, the developer of the W Hotel & Residences in the 2nd street district, is facing delisting from the NASDAQ for failure to promptly file financial reports.

While this sounds bad, the event alone should not jeopardize the project. However, the developer's accounting irregularities and delinquent financial reports will limit financial flexibility until the issue is resolved. This is an especially important issue for the W as one of it major lenders is in precarious financial shape. It could also violate covenants of the project's bank financing.

The best indicator of the situation is the fact that the stock continues to trade at a healthy value, signaling the market's belief that the issues will be resolved. While stock in Stratus is down 50% from it's 2009 high set on January 2nd, it's more than 50% above its March 9 low.

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Tags: news

The most contentious Austin zoning battles relate to development close to Ladybird Lake. The prime downtown lake is considered one of the city's most important natural assets. As a result, the City has been closely examining proposals to protect the lake from future development. Essentially, the City Council would like to limit the height of development on sites directly adjacent to the lake.

Essentially, the City has two goals: first, to control development around the lake. Second, to ensure access to the lake. The appropriate policy action becomes complicated with an important hypothetical: where there are gaps in the hike and bike trail, should the city provide height variances in exchange for trail extension or improved public access to the lake? It's this very real example that been the focus of City Council debate.

Last night, after much discussion, the Council gave the second of three required approvals that limit building heights around the lake to either 60 or 96 feet depending on location. To address the above example the council decided that developers could be allowed to exceed 96 feet "if they can prove doing so would be substantially better for the community." This is a fair compromise that will provide the City with the appropriate zoning tools to protect the lake in the future.

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Tags: zoning, news

Today was a big day for Brazos Place as all 19 remaining units were sold in less than 90 minutes to a packed room of bidders.

On average, the units sold at a 29% discount to the original listing price. This is, however, a useless barometer as the units were not selling well at the original prices. More useful is the average price / square foot which at $281/SF is a 9% discount to the 2008 downtown condo average of $308. Unfortunately for current Brazos Place residents, the units sold for 24% less on a $/SF basis than the $370/SF average of the 12 Brazos Place units sold via MLS in 2008.

Here is the complete auction data:

Unit	Plan	SF	Listing	Opening Bid	Sold (incl. 4% Fee)	$/SF	Discount
709	1 Bedroom / 1 Bath	1272	$414,900	$170,000	$288,080	$226	31%
1007	2 Bedrooms / 2 Baths	1399	$479,900	$190,000	$339,040	$242	29%
708	2 Bedrooms / 2 Baths	1358	$519,900	$210,000	$329,680	$243	37%
1008	2 Bedrooms / 2 Baths	1324	$494,900	$190,000	$326,560	$247	34%
1108	2 Bedrooms / 2 Baths	1324	$504,900	$200,000	$329,680	$249	35%
705	1 Bedroom / 1 Bath	891	$304,900	$120,000	$229,840	$258	25%
1208	2 Bedrooms / 2 Baths	1324	$514,900	$210,000	$346,320	$262	33%
710	1 Bedroom / 1 Bath	623	$199,900	$80,000	$168,480	$270	16%
1103	1 Bedroom / 1 Bath	832	$324,900	$130,000	$229,840	$276	29%
808	2 Bedrooms / 2 Baths	1324	$519,900	$210,000	$374,400	$283	28%
1107	2 Bedrooms / 2 Baths	1399	$489,900	$200,000	$399,360	$285	18%
1109	1 Bedroom / 1 Bath	884	$359,900	$140,000	$255,840	$289	29%
908	2 Bedrooms / 2 Baths	1324	$484,900	$190,000	$385,840	$291	20%
1203	1 Bedroom / 1 Bath	832	$332,400	$130,000	$244,400	$294	26%
1207	2 Bedrooms / 2 Baths	1399	$499,900	$200,000	$418,080	$299	16%
707	2 Bedrooms / 2 Baths	1399	$519,900	$210,000	$422,240	$302	19%
706	1 Bedroom / 1 Bath	812	$339,900	$140,000	$250,640	$309	26%
1210	1 Bedroom / 1 Bath	623	$259,900	$100,000	$200,720	$322	23%
PH	Custom Plan	2745	$1,575,000	$600,000	$967,200	$352	39%

According to the auctioneers, more than 1,000 people pre-viewed units in advance of the auction. A large number bid in person. This is testament to the string demand for downtown housing at the right price. In this light, the auction was a major success. For existing residents of Brazos Place, however, the news is much less positive. Every existing owner most certainly paid substantially more money for their unit than today's auction prices. For them, the real test will be when units sell again on the resale market: prices will likely be somewhere between the original price and the auction discounts.

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Tags: news

BartonPlace would like to invite Austin Towers readers to a live radio discussion on "Dissecting Downtown
Facts vs. Fiction" to be followed by a construction tour of BartonPlace and an afternoon reception.

The details are:

What:
Live Talk Radio Show (1:00pm)
BartonPlace Site Tour(3:30pm)
Afternoon Reception (4-5pm)

When: Sunday, May 24th @1:00pm

Where: BartonPlace PresentationCenter
(1800 Barton Springs Rd)

RSVP by May 20th to ashley@bartonplaceaustin.com Read More...

Tags: news

In eleven days, Brazos Place will auction as many as 20 units to the lowest bidder. The May 17 auction has received lots of press and attention -- in particular because the units are being promoted with incredibly low opening bids. The opening bids start at a too-good-to-be-true $80,000 -- as much as 58% lower than the original unit price.



Are the opening bids too good to be true? Like any auction, it's important to read the fine print. Here are some of the rules of the Brazos Place condo auction:

- The opening bids are not the reserve bid: the reserve bids have not been made public. The units absolutely will not be sold for the starting bid price.

- All buyers must pay a 4% buyers fee on top of their bid.

- Like any resident, buyers will need to pay a monthly condo fee. The average is $400 per month.

- To participate, you must register by 5/14.

- Before you bid, you must provide a $2,500 deposit via cashier's check for each unit you are approved to bid on. You need to show them the check to bid, but you don't hand it over unless you win.

- Successful bidders need to put a 3% deposit if they are purchasing one unit or a 5% deposit if they are purchasing multiple units. This needs to be paid upon successful bid but can be paid with a personal check.

- To be eligible to bid, you must be pre-qualified by Bank of America -- even if you have other arrangements for a loan.

- You can register your broker / agent and they will receive a 2% commission.

- You must close within 30-days (or 45-days for an additional $1,500).

- If you don't close, you will lose as little as $2,500 or as much as 3% of the purchase price.

These rules are not unusual for a condo auction -- in fact, they are quite fair. But it is very important for bidders to understand how the auction will work. In particular, it is essential for buyers to know that they will need to meet a reserve price and pay a 4% buyers premium, important considerations for bidders looking for a great deal.

Tags: news

Earlier this year, Fannie Mae stopped guaranteeing mortgages in new or newly converted condo developments in which fewer than 70 percent of units have been sold or are under contract. Fannie's previous rules set the cutoff at 51 percent. Freddie Mac recently sent a bulletin to sellers and servicers announcing plans to adopt similar restrictions beginning July 1.

The restrictions essentially raise mortgage rates for otherwise conforming mortgages (i.e. under $417,000 in Texas) where the condo development is effected by any of the following issues:

- A new project in which 30% of units have not been sold (or under contract) at the time of completion or closing.

- Existing condo communities where 15 percent or more of owners are delinquent on their association fees by at least 30 days.

- New or existing condo communities where more than 10 percent of units are owned by a single entity.

- New or existing condo communities where more than 20 percent of the total space in a project is used for nonresidential purposes.

Fannie has some flexibility in its presale rules. Developers who don't meet the 70 percent threshold can ask Fannie to waive the restrictions in certain circumstances. So far, more than 90 exemptions have been provided nationwide.

These changes should not have a dramatic effect on the largest and highest profile projects as new units in the big projects are typically priced well over the conforming threshold. For the lower cost high-rise projects where loans are likely to conform, sales rates have been high. Most of the major projects look on track to hit 70% by the time of completion. Most likely to be effected are smaller low-rise projects near downtown and condo conversions in downtown.

Tags: news

Star Riverside, a large condo project under way on the south shore of Ladybird Lake near I-35, has announced that it is going to auction 64-units in partnership with ibidcondo with no minimum price and no minimum bid. Before you call your mortgage broker and grab your credit card checks, the fine print on the Star Riverside auction is downright absurd.



Instead of using a starting or reserve price, ibidcondo starts the process by selling a limited number of "virtual auction seats" which are sold until a minimum price is reached. The auction seat price for each of the 64-units is $100. Here is the crazy catch: the auction doesn't actually happen until enough people have paid $100 for ibidcondo to purchase the unit. So, for the typical $690,000 condo, 6,900 people need to buy $100 seats before the auction starts. Once the auction starts, 6,900 people (or fewer if someone buys multiple seats to compete against themselves) compete to buy the unit. The highest bid wins. The proceeds are then donated to charity after the company takes its undisclosed but likely significant fees.

After the auction, 6,899 people are losers: they are down $100. The one lucky winner gets to participate in one of the least friendly buying processes ever: they have 48 hours from the close of the Auction to (1) deposit the entire bid price into an escrow account maintained by iBidcondo at the Nominated Title Company and (2) execute a purchase and sale agreement with the developer or owner of the property.

Unlike the real auctions taking place soon for units in Brazos Place, this auction is somewhere between a scam and an ill-conceived dot com get-rich-quick scheme. For all the units in Star Riverside to sell, 441,000 bid seats would need to be sold. This, obviously, is never going to happen. The big question is why Star Riverside would associate themselves with such a sketchy endeavor: each auction is bound to leave a bad taste for 6,899 bidders and maybe even the one winner. This is a terrible way to try to sell condos.

On the auction site, there is a link to see previous sales from the company. Currently, the link does not work.

See the ridiculous auction firsthand here.

Tags: news

An article from earlier today on cnn.com discussed the national condo auction market (it is growing fast) and the incentives provided to move condos nationwide. The issue is that condos take years to develop while condo demand can change very fast. As real estate markets across the country have retracted over the last year, condo developers continue to deliver units that have been on the drawing board for years before the current downturn.

While the announcement of the upcoming condo auction at Brazos Place sent shock waves though the Austin condo market, further analysis has shown that these auctions are increasingly common, and that final prices are not nearly as low as the teaser opening bids suggest.

Here are highlights from the CNN article:

A free Lamborghini in Miami, Florida.

Complimentary housekeeping in Phoenix, Arizona.

Two bedrooms for the price of one in Atlanta, Georgia.

It's a buyers market again for condominium shoppers after years of artificially high prices and speculation. Marketing gimmicks, along with auctions, upgrades and incentives, continue to be wildly popular for developers desperate to relieve the inventory glut.

"We want to move the products as fast as we can," said Summer Dunham, marketing manager for Starpointe Communities, which develops luxury condominiums in Scottsdale, Arizona, one of the first states slammed by the nation's housing crises. "It was very slow in 2008. Everyone had difficulty selling."

So in February, the determined company auctioned off 20 four-story condominiums overlooking a golf course, private park and three swimming pools against a mountain backdrop. The upscale properties were priced as high as $1.6 million before the market sank.

The auction was declared a success for the company, which sold nearly all of its units in a weak market where only 115 out of nearly 2,000 available units have closed in the first quarter of this year, according to a report by Metrostudy, a research firm tracking the condo market.

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Tags: news

The Brazos Place auction is big news: residents are outraged, bargain hunters are taking note, and the media is marking the first downtown condo auction with glee. The big story is that opening bids start at less than half of original listing price for most units. The real question should be: what will the units likely sell for? This answer is most relevant to Brazos Place residents and potential buyers alike.

On the assumption that this is not the first condo auction that Beverly Hills-based Kennedy Wilson has conducted, we've done some research.

Last December, 300 people packed the underground basement of a Hyatt in Seattle to bid on 15 units from the Capital Hill Press Condos (shown below) in a similar auction run by the same firm. The auction drew a youngish crowd of potential buyers, in particular people who previously felt priced out of Seattle's downtown condo market. As in Austin, the units were listed at about 50% of their previous listing price.

So what happened? All 15 units sold during the auction. The teaser opening bids worked: the auction was packed and competitive and the units sold for an average of 80% of the listing price. While 20% is still a good discount, it's a lot less than the 50% lowest bid that lures many people to look at the property. When the developers consider mortgage interest, taxes, real estate commissions, marketing costs, and the price of maintaining model units, sales staff, and a sales center, it's easy to see why these auctions are becoming more common around the country.

In Los Angeles, a similar Kennedy Wilson auction drew similar crowds with minimum bids set at nearly 50% off the last asking price. As a result, more than 1,500 shoppers toured the models and about 4,000 requested auction catalogues. On auction day, 387 registered bidders showed up. One again, all units sold during the auction with an average price that was more than 50% above the minimum bid. According to the LA Times: "Even successful bidders said they offered more than they planned on bidding."

While these auctions provided similar results, every building and every market is different. If anything, these comparable auctions show why the developers may have chosen this path. Supposedly, Kennedy Wilson auctioned more than 1,000 condos and houses last year alone. The Brazos Place Auction, it's turnout and activity, will provide a more vivd picture of demand for downtown Austin and for units in converted buildings in particular.

Units at Capital Hill Press Condos in Seattle Were Auctioned in December

Tags: news

In an unfortunate turn for the downtown Austin condo market, the Detroit-based developers of Brazos Place -- a 72 unit condo conversion project on 8th and Brazos -- have posted the remaining 20 units for sale in a surprise auction on May 17.

Like most auctions, the starting bid price is very low -- as little as $80,000 for a small 1/1 to $200K for a 1,400 SF 2/2. While low prices draw the crowds, the units likely have higher reserve prices making it unclear how good a deal awaits buyers. For the developers, the auction is a desperate move: they are clearly sacrificing profits for quick cash, signaling either an immediate cash crisis or, even worse, pessimism in the marketability of the project.

With an average starting bid of $154 / SF, the auction prices start with a 58% discount off the average sale price of $370 for the 12 units listed on MLS over the last year. As a result, current Brazos Place residents are furious. They are rightfully concerned that the fire sale disposal of comparable units will devalue the building and the units that they have invested heavily in.

In reality, it is very difficult to assess the impact of the auction on current residents. First, it's a problem for residents that 20 units are currently on the market. Such a large new developer inventory makes the resale of existing units difficult. The sale of units and elimination of inventory could help by pulling inventory off the market. While the auction will be public record, the sales will likely not be recorded in MLS and will not appear in realtor comparables. The biggest worry for residents should be a failed auction: it would be bad if a large number of units went unsold, especially if some units sold at prices far below recent comparables.

The problem with auctions of this type is that they are really only likely to attract bargain hunters and investors. Unlike with single family homes and cars and furniture and other auctionable goods, condos are not a commodity. The problem is that condo buyers tend to pick the building they want to live in (based on a number of factors including price) and then look for the perfect unit. An auction like this diminishes the value of the primary asset -- the building and its brand -- at the same time it tries to lure 20 buyers to bid in a process that is very different than the normal buying process. The result is likely to attract bargain hunters who will walk when the prices rise towards market levels.

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Tags: news

While it's not our primary focus, there are plenty of interesting condo developments rising outside of downtown Austin. In the portion of East Austin, close to 6th street and within a mile of I-35, a number of affordable, interesting mid-rise projects have risen over the last couple of years.

Today, the 4-floor 60-unit 2124 Condos (located on 6th, one mile East of downtown) announced that they too had sold out. 2124 offered 3 configurations of units ranging in price from the $190s to the $280s. According to the developer, units offer 11ft ceilings, concrete floors, granite countertops, and amazing views of the city. About a dozen units are currently listed for sale or lease on the Austin MLS.

These days, it is simply great news to hear the words "sold out" and "condo" in the same sentence. An article in the Statesman provides additional details:

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Tags: news

The Wall Street Journal is reporting that Austin experienced one of the largest increases in apartment vacancy rates last quarter among major metropolitan areas. The vacancy rate, which jumped to 9.2% from 7.5%, is both high and rapidly growing --- a major problem for landlords and apartment developers.

The problem with the rental market is rooted in recent history. For a long time, Austin has been one of the strongest rental markets in the country in terms of absorption and rent growth. Even as developers rapidly increased the number of units earlier in the decade, the market remain strong as vacancy rates stayed very slow. When the market run finally ended, Austin developers had a record number of units still in the pipeline. The glut of new units is one of the major drivers behind the high vacancy rate.

This phenomena has played out downtown as well with delivery of the Monarch last year and the upcoming completion of the 36-story 259 unit Ashton at 101 Colorado and 31-story 183 unit Legacy on Town Lake. Making things worse, condo investors in major projects such as 360 are adding their units to the leasing market as well.

With oversupply and more units coming, rental rates are bound to drop. Already, existing and prospective tenants have found lots of room to negotiate as the major projects work hard to fill their units. When rental rates drop, there will also be a small negative effect on the condo market as the equation for condo investors shifts for the worse. With strong restrictions on investors in most new projects, this part of the downtown Austin condo market remains relatively small.

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Tags: news

Thanks to the Federal stimulus package, a controversial Federal courthouse will be constructed on the west side of Republic Square Park in the heart of downtown.

The $116 million project will be constructed on the former Intel site. Earlier in the decade, the city pushed the feds hard to locate the courthouse on the abandoned Intel site, only to reverse course later. Once downtown started to flourish with development, the City decided that the prime block would be better used with a multi-use project that would engage the neighborhood. Due to security concerns, the mammoth brutalist courthouse will result in the permanent closure of San Antonio Street between 4th and 5th, assuming that the original plans will be followed. In addition, the single-use building will not include any retail or restaurant space, it will simply be a highly secure federal courthouse.



Here is a summary from the Austin Business Journal:

The long-delayed federal courthouse planned for downtown Austin has been approved for construction with money from the federal stimulus package, according to a congressman’s office.

The White House today approved $116 million from the American Recovery and Reinvestment Act for the U.S. federal courthouse in Austin, said Wyeth Ruthven, a spokesman for U.S. Rep. Lloyd Doggett.

“This $116 million means local construction jobs now when we need them most, a significant addition to downtown Austin, and a long overdue improvement benefiting all who rely upon our federal justice system,” said Doggett, D­-Austin. Doggett voted for the stimulus package.

The planned seven-story Austin courthouse has been delayed for years because of financial reasons. It will be built at the corner of Fifth and Nueces streets, across from Republic Square Park. The design is mostly done.

Tags: new projects, news

This week, 35 residents of The Sabine filed suit against the developers for list of problems that the condo owners say have been ongoing for month. The Sabine is an 80-unit condo conversion project of a mostly-empty office building on Waller Creek into a new condo project adjoining the Hilton Garden Inn on 5th Street near I-35. The project was completed last year although many units still remain on the market.

According to the residents:

- The building seems to have serious elevator problems. In fact, a 12/29 elevator inspection exposed 19 code violations including some that were described as serious safety problems.
- Problems with water leaks, window seals, and sound-proofing.
- Failure to pay property taxes on more than 40 units -- a delinquency which may result in additional litigation

While it is difficult to tell how long it will take to resolve these issues, the problems do indicate quality issues for the newly completed condo conversion project. Litigation like this is rare, and shows that residents are angry and ready to revolt. These problems certainly illustrate the risks of being the first occupants of any building. Buyer have little choice but to take the developers word that they will deliver a quality building without cutting corners.

Article Continues Here: Read More...

Tags: news

Over the last few months, the City has been floating a proposal that would achieve one of Austin's most important urban planning goals: filling the 1.2 mile gap in the 10.1 mile hike and bike trail around Lady Bird Lake. While land owners along the 1.2 mile stretch of the lake have objected, the City has decided to proceed with a proposed over-water boardwalk to complete the loop.

The Boardwalk Trail at Lady Bird Lake would extend the Lady Bird Lake hike and bike trail more than one mile from the east side of the Austin American-Statesman building to Lakeshore Park. Currently, pedestrians, runners and bikers are forced to use the Riverside Drive sidewalk over Interstate 35. While there are some opportunities for extension of the trail on the shore, the trail will be primarily over the water.

The extremely popular trail is a great community asset for anyone who spends time downtown. The bold $15 million project will complete the trail, improving bike and pedestrian access throughout downtown Austin.



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Tags: news

Good news! The City of Austin is considering eliminating 3,800 single space parking meters!

The only downside is that they plan to replace the 3,800 meters with 750 whole block "pay station kiosks" that will make you walk down the block to figure out how to use a complex machine to print a ticket to place on the inside of your car after you walk back down the block.

Why? Apparently, each of the existing meters fails every 90 days on average -- and replacing them with a large complex machine with ink, paper, and an internet connection should eliminate this problem. Coincidentally, it would also allow the city to take credit cards and charge higher prices for downtown parking over time.

All this for just $8.4 million!

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Tags: news

In a highly unusual strategy, Bridges on the Park has announced a "March Sale" in which they have reduced unit prices by 20%. With the reduction, prices start under $300,000 for a 1 bedroom 1 bath unit and under $400,000 for a 1,349 square foot 2/2 unit. The pricing reduction shifted the price per square foot from $350-$430/SF to $285-$340/SF.

Bridges on the Park is a six floor 104 unit project on a 2.5 acre site just south of the lake and the hike & bike trail on South Lamar. The project was recently completed.

During construction, Bridges on the Park raised prices to their current rates after lining up a surprisingly strong waiting list for reservations. When the final prices were announced and the economy turned south, the reservations did not turn into sales as expected. Now Bridges on the Park has restored prices to levels closer to the originally announced amounts. While a highly unusual sales tactic, for new buyers looking to get close to downtown at reasonable price, this is very good news.



Here are some examples of units currently for sale at Bridges on the Park:

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Tags: news

While the economic crisis and continuing problem in the national real estate market dominate the news, Austin's own urbanspace realtors today announced that the firm has added 12 new realtors and plans to move into a new downtown headquarters. For followers of the downtown market, their strength and growth is a powerful sign of the continued interest in downtown Austin living.

Here are some details from the announcement:

As Austin is growing, so is urbanspace. In concert with the growth of the urban market place, the Company has expanded both its team and physical space. In the past six months, the urbanspace team has welcomed 12 new residential and commercial agents to better serve the specialized needs of a dynamic Austin urban market. urbanspace's move into its new home allows it to complement its growth with a space designed to enhance the client experience as well as create a warm work environment for its agents.

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Tags: news

In spite of the difficult economy, the major downtown Austin condo projects continue to move toward completion. Lots of news updates this week:

- Tomorrow, Spring will celebrate its topping off. The 42-story building on 3rd and Bowie just east of Lamar has reached the top and is on track for completion in July. The 246 unit tower will be the first project delivered in 2009. According to the developers, an impressive 55% of units have already been pre-sold. With units starting around $300k, Spring is the most affordable downtown skyscraper currently under construction.

- 360, which was completed last year, has now officially sold 99% of its 430 units, making the project effectively sold out.

- The Four Seasons released a very detailed update of current sales and downtown market conditions including the news that they have now pre-sold nearly 50% of units:

"As we enter 2009, Four Seasons Residences Austin is nearly 50% sold. Understandably, the last quarter of 2008 was slow, but sales activity in 2009 has picked up considerably. In the last week we signed a new contract for a 2,700 square foot residence and have a number of additional contracts in process. We continue to see an influx of interest from people who love Austin and are exploring the opportunity to live at Four Seasons. . .

Article Continues Here: Read More...

Tags: Project Update, news, four seasons, 360

According to the developers, plans for Block 21 -- the large second street development featuring the W Hotel & Residences -- have been revised to include 35,000 feet of office space. Assuming that the size of the project remains the same, office space will account for about 3.5% of the planned one million square foot multi-use project. This is the first new office space to be added downtown in a few years

The project update also included the following new facts:

- The W Hotel & Condo plans remain unchanged.

- So far, 44% of condo units are accounted for -- a number virtually unchanged from the 45% under contract as of 12/1/09. According to the developers, sales have practically stopped since the beginning of the economic crisis in November. With delivery 2 years out, the developers believe they have plenty of time to sell the remaining units.

- The project is proceeding on schedule: the first floor should be poured within the next few weeks

- The size of the Austin City Limits theater may be increased from 2,200 to 2,500 square feet

The $295 million project, to be located directly behind City Hall, will be an important retail and entertainment anchor to the blossoming 2nd Street district.

Block 21 Rendering


Article Continues Here: Read More...

Tags: w hotel & residences, news, Project Update

Over the last year, there has been an amazing flow of rumors about the major downtown Austin condo projects. Most of these rumors have been false. In particular, both the Austonian and W have been plagued with gossip that the projects were facing cancellation. Even in the last month, when construction patterns changed during the normal building process, rumors again started that the project would not be completed.

We've carefully researched these rumors -- including meeting with one of the Austonian developers --and are very comfortable that they are not true. The source of the rumors, for the most part, have been innocent assumptions by people who have been made hyper sensitive by the current crisis. With the housing market struggling, observers take any change as a sign of impending disaster.

The problem has become so acute that the Austonian today announced plans to move an office trailer and remove a crane -- both part of normal operations. The announcement was made to avoid another round of false rumors.

Here is a summary from the Austin Business Journal:

Developers of The Austonian are again warding off rumors of changes to the luxury condo’s plans as the construction team prepares to remove its trailers and a crane.

Article Continues Here: Read More...

Tags: news, Project Update

Across the country, housing starts are down dramatically.

During 1998, Austin builders started construction on slightly more than 8,000 houses last year. This was the lowest number in 11 years.

According to Metrostudy, a Houston-based research firm, ustin has experienced a 66 percent decline in housing starts from its peak in the third quarter of 2006 to the end of 2008. This 2/3 drop represents a mammoth market shift. The drop, both in Austin and nationally, is the result of reduced demand for new units, restricted credit for buyers and developers, and falling prices which have made speculative projects unattractive.

Incredibly enough, this 66% drop ranks Austin #1 of the 81 markets studied by Metrostudy. Austin's relatively strong economy, continued inbound migration, steady home values, and lack of a bubble run up have helped to limit housing market erosion during the current credit and financial crisis.

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Tags: market analysis, news

An article published in Architectural Record, the leading national trade publication for architects, provides an extensive profile of the Austonian.

The article reveals new details about the projects green features including it's "Chilled water HVAC" and rainwater collection system. It also talks about the project's high-end touch screen controls for lighting, security, media, and climate which are included with every unit.

Here is the full story:

At 680 feet tall, the Austonian, designed by Houston-based firm Ziegler Cooper Architects, will be the tallest building in Austin when it’s completed in 2010.

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Tags: news, austonian

UrbanSpace Realtors, a large real estate firm focused on the downtown residential market, has published a comprehensive guide to downtown neighborhoods and living options as well as dozens of their favorite dining, entertainment, and cultural destinations. The guide is amazingly comprehensive: it profiles more than 80 rental and condo projects in and around Austin and shows nearby Urbanspots -- the cool community destinations that draw people downtown. The guidebook groups projects by downtown neighborhood and includes written profiles and a variety of useful maps.

The Urban Lifestyle and Residential Guide is the most comprehensive listing of downtown properties -- including buildings just to the East, South, North, and West of the downtown core covered by AustinTowers. Through special arrangement with UrbanSpace, a free copy of the guide will be mailed for free to any AustinTowers reader who requests one. To get your copy of the guide -- while they last -- click here.



You can get your free copy of the Guide here.

Tags: news

Less than a year ago, the Austin Museum of Art announced a new project which would combine an 40,000 square foot museum facility with an adjacent 425,000 feet of commercial office space in a new 465,000 square foot project on the AMOA-owned site adjacent to Republic Square Park in the center of downtown Austin.

Yesterday, the developers option on the project expired. While the project was supposed to commence construction in early 2009, Hines Interests, LP has been unable to secure the funding required to develop the new building. As a result, AMOA’s latest plan for a significant downtown home are no longer viable.

The project, which was to be designed by the world renown architecture firm, Pelli Clark Pelli, would have been the first major downtown office building since the Frost tower was constructed in 2004. While the cancellation is not surprising in this very difficult commercial financing climate, it does represent a major setback for AMOA which has abandoned multiple plans for a new downtown building over the last decade. Yet, with a prime downtown block under their control, AMOA should be able to find a future partner to revise the project. Even with a development partner, however, it will be difficult for AMOA to rally its patrons to support another capital project after so many failed attempts.



Here is a summary from the Austin Business Journal:

The economic downturn has claimed a major downtown Austin project as victim, the proposed Museum Tower office building and the Austin Museum of Art’s proposed new home.

Hines Interests LP will not renew its option on the land owned by the Austin Museum of Art when that option expires this afternoon, the last day of 2008. That land had been slated for a 30-story, 425,000-square-foot office building dubbed the Museum Tower and a new home for AMOA.

AMOA had planned to sell a portion of the block it owns just south of Republic Square Park to Hines for the tower. As part of the deal, the Houston-based real estate company was also going to build a new 3-story, 40,000-square-foot home for the museum.

In response to questions from the Austin Business Journal , Hines released a statement from Travis Overall, Hines vice president, saying: “Due to the uncertain economy, we made the difficult decision not to renew the option in 2009. However, Hines is still interested in developing an office building in Austin when the market recovers, and we hope it will be in conjunction with AMOA and its museum. The project will not restart until the market improves. Our hope would be to get a new deal together in 2009 or 2010, and then move full steam ahead. We see great potential in the long-term viability of the city of Austin.”

The Museum Tower would have been the first new, large-scale office project in downtown since construction was completed on the Frost Bank Tower in 2004.

For the museum, the project also represented a chance to achieve its longstanding dream for a new downtown home. The new museum space was planned to double AMOA’s exhibit and education space from the 16,000 square feet it currently inhabits at the 823 Congress office building.

“Hines has been an excellent partner, and AMOA looks forward to building a new home for AMOA-Downtown when economic conditions become more favorable,” AMOA officials said.

This is the latest blow for AMOA, which has been trying since the late 1990s to develop a new facility downtown. In August 2006, AMOA said it was planning to partner with local developer Tom Stacy on the creation of condo tower and new museum on the site south of Republic Square. But the deal never materialized. The museum ultimately had to taper its wishes -- and even cut staff -- when the economy went south after the dot-com bubble burst.

Tags: news, Project Update

No downtown Austin project is more controversial than the mammoth Marriott complex between 2nd and 3rd between Congress and Brazos. The massive and thoroughly unispiring project has many enemies across the city for many reasons. First, the project is large and architecturally mediocre. Second, the project lacks a plan to extend the retail streetscape on a critical downtown block. Finally, it displaced a number of beloved local businesses including the restaurant Las Manitas, the folk art store Tesoros trading company, as well as a downtown daycare center.

Although the global economic crisis has delayed the $275 million 1,000 room project, the existing storefronts were demolished this week. Now, the critical block at the intersection of Congress Avenue, the Second Street District, and the Convention Center district will lay empty. The Marriott compex has managed to eliminate three core businesses from Congress street with no future project in site. Fortunately, Tesoros has reopened on South Congress, the day care center is moving, and Las Manitas is expected to open at some point in the future in a different building on the same block.

Las Manitas Demolition (Photo by Paul D’Arcy)


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Tags: news

For those who feel that the heart of downtown Austin is the aging Green water treatment plant, today is a sad day. After 83 years, the Green plant has been decommissioned as a first step to redevelopment of the prime site just north of Ladybird lake.

With the removal of the plant, the City begins ones of its most important and ambitious urban redevelopment projects. Over the next few years, the City and developer Trammell Crow will remove the plant and replace it with large scale multi-use development that restores the natural street grid. In fact, Trammell Crow was selected because they proposed the most dense and ambitious plan for the site

When the project is complete, as many as five high-rise buildings - some as tall as 40-stories -- will be added to the Austin skyline. In addition, a new retail district will connect the 2nd street district to the Seaholm development, creating a vibrant new downtown region which will draw many more residents, workers, and visitor downtown for shopping, dining, and entertainment.

Renderings of Proposed Green Water Treatment Plant Redevelopment


The Trammell Crow proposal for the Green site includes the following components: Read More...

Tags: news, Project Update

Each week, 55 truckloads of concrete and 50 tons of structural steel are added to the structure of the Austonian, growing what will be the tallest building in Austin by one more floor. This week, the Austonian hit the half-way point -- the 28th floor was poured ad the project continues on its march to completion in 2010.

Since it has been a little while, here are the key 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.

The Austonian under Construction (D’Arcy)


Here is the summary from the Statesman: Read More...

Tags: Project Update, news, austonian

Before the economy entered a total nosedive, the first signs of real estate problems began with the credit crunch and out-of-control mortgage rates. Starting 18 months ago, mortgage rates began to spike -- especially for jumbo loans over $417,000.

Over the last few weeks, mortgage rates have dropped significantly. While jumbo loans are higher, lending standards are stricter, and down payments are required, rates are once again becoming very attractive. According to Zillow, the average rate on a conventional 30-year loan is now 5.42%. On 15-Year loans the rate is now 5.11% -- and some 15-year loans can even be found for under 5%. Jumbo loans, however, still remain well over 6%.

As mortgages continue to drop, the Treasury Department has begun to circulate a proposal for the government to boost the sagging U.S. real estate market by backing programs that would drop 30-year conventional mortgage rates nationally to as low as 4.5% for new home purchases. These rates would mark historic lows and would certainly drive new buyers into the market.

For downtown Austin, falling rates and new low rate programs would certainly spur demand, helping to fill out vacancies in many of the projects currently under development. These changes would be unlikely, however, to effect the tight commercial credit and investment markets, still making it hard for developers to bring new unfunded projects to market.

Here is the summary of the Treasury program from CNN:

NEW YORK (CNNMoney.com) -- Lobbyists are pushing the Treasury Department to consider a plan to purchase mortgage-backed securities in the hopes of driving mortgage rates to as low as 4.5%, an industry source said.
Read More...

Tags: news

Today, AustinTowers is very lucky to have the opportunity to interview Kevin Burns, the visionary founder of urbanspace Realtors. Kevin is a long-time downtown resident and a true expert on the downtown Austin condo market.

Founded just 8 years ago, urbanspace has made its name as the most important downtown-focused real estate agency. In this short period of time, it has grown to become one of the most successful agencies in the city.

Urbanspace was AustinTowers first sponsor and we have been working hard to get Kevin to sit down and share his insights on the local market.


Kevin Burns
urbanspace CEO & Broker

Here is transcript of our interview with Kevin Burns:

How long have you lived in Austin?

I have lived in Austin for over 13 years. I came here in 1995 to attend the University of Texas. I fell in love with this city and never left. I earned my real estate license in 1997 between my sophomore and junior years at UT. In 1999 I graduated from UT with a degree in economics along with a concentration in real estate investment and finance.
 
Where do you live?

I have lived in Austin’s urban core since 2000 when I founded urbanspace Realtors, LLP. I have owned and lived at the Talisman condominiums on Barton Springs, The Austin City Lofts, The Milago Condominiums, a home on south 3rd st 11 blocks from Lady Bird Lake and my next residence is at the W that I currently have under contract. I chose the W because of its proximity to Lady Bird Lake, Second Street Retail District, Whole Foods and the warehouse district. Furthermore, it offered the size unit that would allow my wife, two daughters and dog to live comfortably. I also like the design of the building, the layout of the units and access to the hotel amenities. Also not to forget the easy access to Austin City Limits below.
 
Why live downtown --- what are your favorite reasons to be downtown?

Why live downtown… There are so many reasons to live downtown. I have lived in both the suburbs and the urban environment. I choose downtown. Why, because of the quality of life that it affords. I hate sitting around behind my tv… when I live downtown there is always something to do. I like being around people… there are always people around in downtown. Because downtown is so pedestrian friendly, I seem to run into friends, business acquaintances and neighbors almost every time that I take a walk downtown. Chance encounters on the street are one of my favorite things and this happens all the time in downtown Austin. I like the convenience of downtown… I can walk, bike or drive to anything I need inside of a few minutes. I never have to go north of MLK or much south of Ben White. I love being able to get on the trail and be a part of nature while still being in the center of the action. You can buy whatever you need (and want) in downtown Austin now. That was not always the case…  I like being a regular at my favorite, restaurants and bars downtown that are just a short walk from home. I like the views from the buildings that I have lived in. I like not having to maintain a yard, take my trash cans to the curb, deal with a roof leak, etc… I like having a concierge accept packages, call my cabs, greet me at the door. I like the sense of security of being in a high rise. I like having a pool, spa and fitness facility at my disposal. I like the camaraderie of the different buildings. Each building has its own personality and style. I have found living in the different buildings that each one has afforded a different style, group of people, etc… some of my best friends I met because we lived in the same building. You do not seem to get that in the suburbs… In the W, I know half of the people that have purchased there… and they are all great, unique, interesting people… and they are all very different.
 
Whether size, view, or décor, what is the coolest downtown unit that you have seen?

Regarding my favorite residences in downtown… I have several picks. One of my favorites is PH22 at the Milago. It is a 2/2.5 with a study that has one of the best views of Lady Bird Lake and downtown. It was custom designed for the developer of Milago. The developer let his interior designer go all out with no expense spared. From the lighting and electronic curtains to the agate countertops and Miele appliances. Another one of my favorites is unit 102 at the Austin City Lofts. It is a unique first floor unit tucked away off of the street overlooking the pool and Shoal Creek. It is perched about 15 feet off the ground so it looks right at the bamboo and trees. You almost forget that you are downtown in this unit. The owner of this particular residence has traveled the world and brought back bits and pieces of his favorite places. From the 11’x11’ antique doors from India to the muralist from central Mexico to the modern clean lined cabinetry.
 
What led you to start urbanspace?

I founded urbanspace because I have always have loved urban environments. I grew up in downtown Charleston, West Virginia a block from the Capitol, next to the river and in the heart of the historic district. This is what I know. When I started my career in real estate, I did everything under sun. One day I was selling a ranch in Blanco County, the next I was doing a downtown commercial lease. I realized that if I was every going to become great at what I do, I had to focus, be passionate about what I was selling and most importantly become mayor of my zip code. Will Wynn has definitely given me a run for my money… The mixed use aspect of the urban core is what drives me. When I founded urbanspace there was very little product and variety to sell downtown, so I spent most of my time in the early days of my business advocating for downtown. It has now paid off…
 
How would you describe the different downtown lifestyles available to buyers?

Here is how I would describe the downtown lifestyles available in Austin:
 
High rise: The high rise lifestyle is rich in amenities, service and views. The floorplans are more traditional in nature with partitioned spaces. HOA fees are usually a bit higher, however you get what you pay for.

Low Rise:  In many cases, fewer amenities, no concierge or doorman, stairs are the way you to your residences, etc. Floorplans vary from partitioned traditional spaces to open lofts. HOA fees are usually cheaper than highrises.

Loft: Open environment, usually in a converted building (adaptive reuse of an office or warehouse building). These spaces work well for singles and couples, not so much for families. They are great for entertaining, artists, etc… they can be found in high rise or low rise environments. Amenities vary based upon building.

Single family home: Believe it or not there are quite a few single family home options in downtown. The advantage is you get a yard and you make all of the decisions about your property. The disadvantage is you have to make all of the decisions about your property.

Townhouse: a nice compromise between single family and highrise. If you need a yard, yet you do not want to deal with maintenance, this becomes a nice option.
 
How much interest do you see in downtown living?

Seems like everyone is at least curious about downtown living. I do not think it is for everyone, however I have found that downtown Austin is one of the most diverse neighborhoods in Austin. I have also noticed that most people that try living downtown love it and stay. I continue to see very strong interest in downtown Austin, especially due to the increased number of options that have become available over the past few years.
 
Describe the typical downtown condo buyer?

The typical downtown condo buyer is anyone that enjoys being a part of a vibrant, convenient, pedestrian friendly neighborhood. Demographics are completely across the board. From singles to young families to empty nesters. The days of downtown being only for bachelors, artists and homeless people are long gone.

Why does a buyer need a realtor, can’t they just go sales office to sales office until they find the right unit?

A buyer can go directly into a condominium sales center without a Realtor, however I recommend working with a Realtor that is knowledgeable about downtown Austin. In many cases there can be substantial differences in value of a unit based upon a myriad of factors. A knowledgeable Realtor can help you through the process in finding the right you to fit the buyer’s needs. Furthermore, the Realtor can work as the buyer’s advocate through the process. I also feel that it is important to view multiple properties before buying so that you can make sure that you find the unit and building that fit your needs and personality best. A Realtor can show you all available properties in the marketplace.
 
What is different about buying a condo v. a single family residence?

There are several differences between buying a condo vs. a single family residence. It is very important to understand health of the Home Owner’s Association for a condominium project. Your value in a condo is directly tied to the condo project. If it is a desirable project, it can increase the value of the condo significantly. If it is not a desirable project or has a weak HOA you run the risk of the value of the condo being affected. The same holds true with which neighborhood you buy your single family home in. Other important things to consider when purchasing a condominium is the parking situation, views along with factors that could affect your view, HOA fees, etc…
 
What advice do you give people who are beginning their search for a downtown condo?

My advice to someone who is beginning their search for a downtown condo is to contact urbanspace. (or another knowledgeable downtown real estate company).
 
Can you share one fact that most people don’t know about the downtown condo market?

Each of the condominium projects are alive. They each have their own personality, strengths, weaknesses, etc… it is very important for a perspective buyer to figure out what is important to them and then learn about the personalities of each of the buildings before making a decision on which building to buy into.
 
Kevin, thank you again for your time! If you have further questions for Kevin, he can be reached here.

Tags: news

Last week, the Statesman wrote a very strongly worded article suggesting the impending collapse of the downtown condo market. The article was based on the following assertions:

- With mortgages tough to get and consumer confidence eroding, it is a tough time to sell real estate
- The capital markets are a mess, making it difficult for new projects to get the financing they need to get off the ground
- Sales absorption has slowed as the economy has weakened

These comments are all true and all derivatives of a single fact: the national economy is a mess. Over the last few months, the financial markets have plunged, the government has invested $8 billion in bailouts, and U.S. real estate is experiencing an unprecedented erosion of value.

It is true, it is a very difficult time to be raising money for a project or selling real estate --- no matter who you are. The Austin economy and real estate market has eroded but still remains much stronger than similar markets in almost every other city in the country. And the problems here are the same whether you are selling a million dollar house in Barton Creek or a million dollar condo: fewer people think it is a good time to buy real estate.

What does this mean for the downtown condo market? Let me start by what it does not mean: it does not mean that the new buildings will never be filled, it does not mean additional buildings will never be built, and it does not mean condo values will plunge disproportionally. What it does mean is that the condo market is not isolated from the real estate problems facing the rest of the city, especially when it comes to million dollar units. In addition -- because condo projects take a long time to be built -- it means that the new units currently under construction will be all that is available for the next 2-3 years.

For buyers, the current market provides additional leverage. In this environment, buyers should be able to get price reductions or free upgrades in many of the projects. At this point, there is no fire sale: developers would prefer to wait out the market than give unbuilt units away.

As part of their survey of the market, the Statesman provided updated sales numbers for four of the largest projects:

360 - 96% under contract, 91% closed
Spring - 50% under contract
Four Seasons Residences - 50% under contract
W Hotel & Residences - 45% under contract

As usual, the Austonian did not provide any sales numbers. As we wrote in mid-2007, “It remains to be seen how many high end condo units can be absorbed by the Austin market. In the Austonian alone, there will likely be more than 100 units priced over $1 million -- that is a lot of inventory in one building. The project's construction budget alone is greater than $1 million per unit which should provide an indication of the average unit selling price.”

Here are key excerpts from the Statesman Article: Read More...

Tags: market analysis, news

One of the most exciting downtown projects is the redevelopment of the decommissioned Seaholm Power plant. The $117.2 million project, a partnership between the city and Southwest Strategies, will result in a 22-story hotel, 60 condo units, and 180,000 square feet of retail and commercial space.

This week, the project inched a step closer to beginning construction in 2009 with City approval of a financing scheme to generate revenue for the site preparation and infrastructure enhancements that the site requires. Essentially, the city issued bonds which will be repaid through the incremental property tax revenue generated by the development.

Once complete, the 150,000-square-foot decommissioned power plant will be the centerpiece of the 7.8-acre property across Cesar Chavez Street from Lady Bird Lake. With offices, retail, and at least 3 acres of open space, Seaholm will shift the center of downtown activity to the west. While downtown life used to center around 6th street between Congress and red river, the warehouse district, 2nd street district, and Whole Foods have shifted the balance. With Seaholm, the downtown action will increasingly be centered between Congress, Lamar, 5th, and Town Lake.

The most exciting part of the project is the redevelopment of the Seaholm facility itself. When complete, the art deco structure will include nearly 100,000 square feet of retail and restaurants. Construction will begin 2009, with the final project scheduled for completion in 2011.



Here is a summary from the Austin Business Journal:

The city of Austin approved the creation of a tax increment financing reinvestment zone to pay for public improvements for the Seaholm redevelopment project.

The TIF will be within the area bounded on the west by the planned Seaholm Drive, on the south by Cesar Chavez Street, on the east by West Avenue and on the north by Third Street. . .

. . . Under state law, a tax increment reinvestment zone contributes property taxes from the increase in real property value within the district toward the project’s public improvements. The public infrastructure and power plant rehabilitation will be primarily funded by issuing debt that will be repaid from the tax increment revenue. The TIF has a 30-year duration.

Tags: news, Project Update

If you are shopping for a downtown condo but are averse to visiting sales offices or speaking with realtors, 360 has been a very frustrating project. They have refused to list units on their website, have avoided the MLS, and generally made it difficult for buyers to engage. With a supposed waiting list of more than 200 buyers for 430 sold out units, many prospective buyers decided it was a waste of time to even call.

Even with residents moving in and with some likely to sell, restrictive covenants have prevented buyers from selling their units. As a result, the 360 mystery has remained intact.

Now,with the project finally complete and the waiting list long ago evaporated, the sales office is finally listing units on the MLS. As always, we have added 360 to our Listings page. Currently, there are 9 listings for units in 360 ranging from $250K for an 812 square foot 1/1 on the 20th floor to $528K for a 1,308 square foot 2/2 unit on the 35th floor. While all units include 10 foot ceilings, oak flooring, 24-hour concierge, and a shared pool and fitness center, some units include upgraded appliances and features.

View the 360 listings here.

Here are additional images from the listings:

Tags: 360, news

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, is set to emerge from its construction freeze after months of inactivity.

After running into financial problems, the project was halted during a rare mid-construction freeze. 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. With the interest accumulating 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.

In the latest move, one of the founding partners has sold the shares of another partner to a syndicate of three new investors. With fresh capital injected into the project, La Vista on Lavaca is set to resume construction in January.





Here is a summary from the Austin Business Journal:

A $30 million condominium project near the University of Texas that’s been delayed for eight years has new partners that plan to move it forward again.Mary Guerrero-McDonald, one of the original partners in the project, says she has sold a portion of the LaVista on Lavaca condominium project for an undisclosed amount to three new partners: Mac Pike, a partner in the Sutton Co.; Austin real estate developer Jimmy Nassour; and a third undisclosed partner.Guerrero-McDonald had previously partnered with Gene Fondren, a lobbyist for the Texas Automobile Dealers Association who suffered a stroke. Guerrero-McDonald says she sold Fondren’s portion to the three new investors, and says she will remain involved as a partner.Pike declined to say how much Sutton and the two investors paid for the project, but says construction should start again in early January.

Tags: news

Austin Towers checked-in with BartonPlace this week and learned that construction continues to progress on schedule. BartonPlace is a 6-building, 6-story condo project with 270 total units located on Barton Springs Road near Zilker Park.

As of this week, the developers have completed the garage structure, courtyard, and first floor of the two southernmost buildings. In mid-November, construction will begin on the next two buildings. At this pace, the first two buildings will be complete at the end of 2009. According to the developers, buyers in those buildings are making palette selections during the month of November 2008.



BartonPlace still has 1,2, and 3 bedroom units available starting in the high $200’s. Some units can be seen on the Austin Towers listing page.

Tags: news

Grayco partners of Houston has been assembling a mammoth parcel of land on Riverside drive -- just East of I-35 -- for a development that was originally planned to encompass 50 acres, as many as 2,150 apartments and condos, and as much as 450,000 square feet of commercial space.

Despite the financial crisis which has depressed development in Austin and across the country, Grayco this week announced it’s intentions to proceed with large scale development of the site. Under the revised plans, Grayco will replace a 30-year-old 1,000-unit apartment complex with as many as 1,380 new Apartments, condominiums and townhomes that will be priced from the low $200s with rents for the apartments starting at $1,100 per month. The new project will encompass 30 acres and will also include as much as 97,000 square feet of retail, commercial, and restaurant space. The project is slated to begin construction in early 2009.

The most notable element of this project is its scale: Grayco’s plan seems to be to create an entire district, a whole new neighborhood to attract residents to this emerging near-downtown market. While the final plans have not been released -- and the developers have hinted that the final proposal may be less urban -- the scale of the project is certain to remain large.

For those who have been anxiously watching the broad redevelopment of downtown Austin and worrying about the effects of the current crisis, this project reminds us of the strong long-term fundamentals of the downtown market. For developers who take a long-term perspective, the market remains attractive. With strong population growth, limited downtown housing, and a sizable population of people who want to live downtown, long-term demand should be strong for reasonably priced condo and rental units.

Renderings of Grayco’s Riverside Project as Originally Planned


Here is a summary from the Statesman:

The economic downturn hasn't derailed plans for the biggest redevelopment project proposed along East Riverside Drive.

But talk among city leaders about the possibility of running light-rail service from downtown to the airport has caused the developer to postpone planning for a portion of the project.

Houston-based Grayco Partners is moving forward with most of its proposed 30-acre project between Riverside and South Lakeshore Boulevard, where it plans to replace blocks of aging apartments and retail strip centers with a dense district of townhouses, condominiums and higher-end retail.

But the developer has decided to remove nearly 10 acres along Riverside from its initial rezoning request to the city to see if the proposed rail line championed by Mayor Will Wynn and Council Member Brewster McCracken will become a reality.

City leaders have encouraged dense development around rail stations along the commuter rail line scheduled to open next year.

They think so-called transit-oriented development can accommodate large numbers of people without adding substantially more traffic to the city's congested streets. They also hope that these mixed-use developments will generate more tax revenue for the city while costing less to service than more spread-out, single-use development.

A rail line along Riverside would be more ambitious than the initial commuter rail line because it wouldn't run along existing tracks.

ROMA Design Group, a consultant hired by the city to develop a downtown plan that includes transportation, has recommended running a line from the old Mueller airport property through the University of Texas and downtown and then out Riverside Drive to Austin-Bergstrom International Airport.

ROMA estimates the 15.3-mile line would cost $550 million to $614 million to build and $21 million to $23 million a year to operate. . . .

Grayco initially sought approval to build as much as 450,000 square feet of retail. Most of that would be built near and along Riverside Drive. With that property excluded from the current rezoning request, Grayco is seeking to build about 97,000 square feet of commercial, retail and restaurant space, along with up to 1,380 residential units.

Grayco's attorney Steve Drenner said a rail station near the property wouldn't necessarily result in greater density near Riverside, but the developer didn't want to move forward with the costly and time-consuming planning of that portion of the property without knowing what city leaders would want to see built there.

"We don't know whether the city would want us to be a transit-oriented development or what type of retail mix use they might want to see along there," Drenner said. "Rather than try to guess at it and convince the city that was the appropriate way to go we thought we'd take that out of the zoning case."

McCracken said Grayco has discussed two versions of that portion of the project with him, and the developer was leaning toward a more traditional suburban design in the absence of rail service.

Drenner said the slowdown in the real estate market had nothing to do with the decision and shouldn't affect Grayco's goal to begin construction in 2009 because the developer planned to build the townhouses and condos along and near Lakeshore Boulevard first.

"We didn't have to have a decision about the frontage in order to proceed with first phases," Drenner said.

But Grayco has decided to indefinitely postpone buying 20 additional acres from Cypress Real Estate Advisors. That property, just east of Grayco's land, will be allowed to have 1,000 attached residential units.

Tags: new projects, news

Austin Towers Editor Paul D’Arcy was featured Thursday in a KXAN NBC Austin News story on the downtown Austin rental market.

As we have reported, Austin has been one of the strongest rental markets in the country. As rents increased while supply grew, developers continued to come to Austin to add new rental capacity. Over the last few months, this trend has reversed. With thousands of new units hitting the market and economic conditions deteriorating, both rents and vacancy have begun to slide.



Watch the full story here or read the transcript below:

Apartment rental prices are going down in Austin. A new report by Dallas-based Axiometrics said Austin's annual rents only grew nearly 1 percent for the third quarter 2008, compared to 5.6 percent in the third quarter of 2007. Rental market experts said they are also seeing huge price drops across the city.

"Some of the big projects have actually gone back to renters with huge price drops as much as 30 percent to keep them in their units without them even asking for it," said austintowers.net Editor Paul D'Arcy.

D'Arcy said supply is going up as well.

"We expect to see thousands of new units for the rest of this year," said D'Arcy. "We expect to see thousands of more units hitting in 2009 and that is only going to put more downward pressure on rental prices."

Renters are already experiencing drops in prices and more incentives offered to get them to sign leases.

"In August, as things started to slow down, at least the prices began to drop a little more and the specials started coming out," said Melvin Bunkley, who moved into the Waters Edge Apartments in North Austin. "They really want the renters."

He said he had plenty of options in apartment choices but decided on Waters Edge because of the amenities.

"Renters have bargaining power, there is no doubt about it," said D'Arcy.

Nationwide, rent increases went from 2.1 percent to 0.8 percent. Vacancies in Austin are at 6 percent compared to 5 percent in the third quarter of 2007.

Tags: news

For downtown Austin condo shoppers, there is no better way to survey downtown living options than the annual DANA Downtown Living Tour. DANA just announced the details for the upcoming 2008 tour. Here is the announcement:

The Downtown Austin Neighborhood Association (DANA) is holding its 5th Annual Downtown Living Tour Sunday, October 19th, from noon to 5 pm.  The event showcases homes and the benefits of living in downtown Austin.
 
The Downtown Living Tour attracts hundreds of attendees each year and funds DANA-sponsored activities and charities.  Participants take walking tours of downtown residences and retail and entertainment spots.
 
This year's tour will feature the 360 Condominiums, Gables West, Austonian, and other residences.  Second Street retailers will also be catering to the tour’s attendees, and a happy hour (5 - 7 pm) with complimentary food and beverages will follow the tour at the Belmont.  On the eve of the event, VIP ticket holders will enjoy music, food, and drinks poolside at the 360 Condominiums.
 
Tickets are available through DANA's web site at www.downtownaustin.org/DLT.html.  Prices range from $15 for the Tour and $30 for the Tour and VIP party.  The Austin Parks Foundation will receive a portion of the proceeds from this year’s tour.
 
The tour's title sponsor this year is Urbanspace Realtors.  “Over the last 10 years, downtown Austin has experienced intelligent, thoughtful development, fostered by the Downtown Austin Neighborhood Association,” says Urbanspace’s Kevin Burns.
 
“With parks and Lady Bird Lake, shopping, entertainment, food, and arts, downtown Austin has developed into one of the most vibrant urban cores in our nation.  Since 2000, Urbanspace has been an ambassador of urban living, and has grown with Austin’s downtown neighborhood,” says Burns.
 
DANA's mission is to improve the quality of life for those who live, work and play downtown. DANA influences decisions that affect downtown, educates and listens to residents and stakeholders about downtown and issues that affect them, and fosters a downtown community through social events.

Tags: news

With the large number of downtown building projects under construction, planned, or pending, there are not too many open lots awaiting development. Now, an important new site is about to hit the market just a block from the prime 6th & Congress intersection.

The Texas General Land Office is selling it’s now-vacant prototypical 50s building, formerly the Texas Comptrollers office, to raise money for the State’s Permanent School Fund.

The site is located in a prime downtown location on 6th and Colorado street. Free of Capital View Corridor restrictions, the site will most likely be developed as condos, commercial office space, or as a hotel.



According to the Austin Business Journal:

A major downtown tower could soon replace the vacant 1950s building at the corner of Sixth and Colorado streets.

The Texas General Land Office confirms it’s working with CB Richard Ellis Inc. to put the 76,000-square-foot Starr Building and adjacent garage up for sale. A deal has not been signed, but the GLO hopes to contract with CBRE to put the property on the market in the next month.

The GLO acquired the four-story building in 2005 on behalf of the state’s Permanent School Fund for just over $4 million. That same year the building’s last tenant, the Texas Comptroller’s Office, moved out and the property has been unoccupied since.

The GLO staff has determined the best use for the property would be to demolish the building and build a new structure on the site, Press Secretary Jim Suydam says. The GLO will evaluate the purchase proposals it receives and likely choose the one that nets the most money for the school fund. The Permanent School Fund’s board would have to approve the sales agreement.

Tags: news

Despite all of the media’s discussion of the so-called downtown Austin “condo glut,” it remains very difficult to get a new unit in a downtown highrise condo project. With 360 and the Shore essentially sold out, the market remains tight for buyers who are ready to move.

This week, however, comes good news for buyers with the opening of Brazos Place on 8th street between Brazos and Congress. Brazos Place houses 72 units in the redeveloped shell of the former Commore Perry hotel. With fewer than 12 units still available (Brazos Place Listings) ranging from a 623 SF 1/1 for a very reasonble $259,000 to a 1,399 SF 2/2 for $464,900 to a 2,745 SF 3/3 penthouse for $1.575M, Brazos Place is nearly 85% sold out and is available for immediate occupancy.

In addition, the developers have announced that they are providing incentives on some of the remaining units:

- $15,000 to $25,000 off for any contracts signed on 2-bedroom units by August 31, 2008.

- Onee year of free association dues on any one bedroom units put under contract by August 31, 2008.

Finally, the project has annonced new retail tenants. Anthony Nak and
Ana's Market are currently open. Baby Green's (salads & wraps) and
Launchpad Coworking (an internet cafe/bar) will be open by October 08.

Here are current images of the project:

Tags: news

The developer of the 290 room Hotel Van Zandt and the 55 luxury Residences at the Hotel Van Zandt have announced that they are abandoning plans for the condo portion ofthe project. Instead of a 29-story tower with hotel and condos, the developers will proceed with a scaled-back 16-story hotel on the site near the Shore in the southeast corner of downtown.

The Residences at the Hotel Van Zandt were to feature 55 units ranging in size from 1,400 to 5,200 square feet and ranging in cost from $500,000 to $2 million. As we have mentioned before, it’s a tough time to get financing for large condo projects and many of the projects that have been conceptualized but not yet broken ground may face cancellation. For buildings that are already under construction -- the Austonian, Spring, W Hotel & Residences, Four Seasons Residences, BartonPlace -- are all expected to be completed as planned.

THE ORIGINAL PLAN FOR THE HOTEL VAN ZANDT:


THE NEW PLAN FOR THE HOTEL VAN ZANDT:

Tags: news, hotel van zandt

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

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

If you are interested in living in a downtown condo, the best buying opportunities are often during the “Pre-Construction” process. Before a project has funding, the developer must fill at least 50% of the proposed units with prospective buyers. To do this, they often offer discounts and other incentives to draw in buyers.

Those that are willing to take the risk, and wait the longest time -- often 2-3 years -- may get the biggest reward. They get the most choice units, and often at slightly reduced prices. The risk, however, is real: If the project is never built, the buyer will get their money back but must start anew in their search for a condo. For buyers in projects like 360, the best units went quickly and at reasonable prices. Today, the project opens with no available units and a waiting list of more than 200 potential buyers whose only option will be to wait for units to hit the secondary market.

Perry Henderson published a great summary of the pre-constructions sales process in his blog which we have reprinted here:

Pre-Construction Condos: How the Process Works in downtown Austin

When you buy a home that's not built yet, there can be setbacks before you move in. Here are steps to buying a pre-construction condo

Pre-construction condos are units that have been proposed by a developer, but have not yet been built. When you purchase a pre-construction unit, you are putting money down before construction begins. Buying a pre-construction condominium can be a great opportunity, but you should proceed with caution. Because you are buying into something that does not yet exist, there is greater potential for unforeseen problems and setbacks before you move into your home. By understanding the risks and planning carefully, you can avoid complications and come out a winner.

Advantages
The main advantage to buying into a condominium development before construction starts is that you often get a lower price than if you buy when construction is complete. The reason for this is that developers typically need pre-construction sales of 50 percent to 90 percent of the units in a development before they can borrow funds to begin construction. Pre-construction condos can also get you in on the ground floor of an investment that will appreciate. The market value of pre-construction units generally increases during the one to three years it takes to build a development, so your unit may be worth more than you’ve paid for it before you set foot in the place. In addition, you can often choose from a variety of finishes and flooring options, allowing you to customize your home.

How the process works
There are several steps to buying a pre-construction condo. They can vary from developer to developer, but the basic components are:

1. Reservation agreement You give a deposit (usually between $5,000 and $10,000) to reserve the unit and set the price (although the builder can reserve the right to change the price in the contract). The deposit is held in escrow and you can cancel the agreement at any time with a full refund.

2. Condominium documents When a development is approved for construction, the developer submits condominium documents (including budgets, association rules, unit descriptions, materials and other important information) for approval by the state. Once the documents are approved, they are sent to you for review. Read them carefully to make sure that you will be comfortable living by the association rules.

3. Right of rescission Once you receive the condominium documents, you have a 15-day period to decide whether you would like to proceed into a binding contract. If you don’t, you can exercise your right of rescission and withdraw with a full refund.

4. Hard contract If you don’t withdraw, you’ll provide the balance of the required down payment, usually 15 to 20 percent of the purchase price, and sign a binding contract agreeing to purchase the condominium. You generally have seven days after that to cancel. This is your last chance to walk away with no penalty.

5. Closing When construction is nearly finished, the developer will issue you a Certificate of Occupancy. A closing date is set when you will hand over the balance of the purchase price and sign the final documents. If all goes according to plan, your closing will coincide with your move-in date, and you will be ready to enjoy your new home.

The original article can be found here.

Tags: costs, news, market analysis

Last September, Fortis Development proposed a 250-foot, 200-unit, 25-story tower on 8th street and West Avenue near downtown. Since the area is currently zoned for buildings no taller than 60 feet, the project required a zoning variance or zoning change.

This week, the developers continued to press their case to the ciry for the zoning change, proving that the project is very much alive. As part of the process, the architects have presented four design options for the city to evaluate. all design have public parks in the back facing shoal creek. In the future, a trail will run alongside the creek connecting the building directly to the hike and bike trails and Ladybird Lake.

As we have reported, this decision may be a tough one for the city council: they need to decide on the boundaries of Austin's high-rise downtown. In the projects favor, it is within two blocks of the Nokonah at 9th and Lamar, CLB's proposed 33-story super tower on 7th and Rio Grande, and another project on 6th and West. As the developer points out, it is one of very few downtown blocks free of capital view corridor restrictions.



Here are the details on the proposed project:

- 200 condos in a single 25-story tower
- Lot size is 1.2 Acres
- Proposed building size is 25 stories totalling 130,605 square feet
- The project would include 143 parking spaces
- Planned amenities include a sun deck, gardens, and public trails connecting the building to the Shpal Creek greenbelt

Here are additional details from the Austin Chronicle:

Another test of council will concerning building heights in western Downtown: The zoning case for 800 West Ave., a 1.2-acre Shoal Creek-front site at the corner of Eighth Street, returned to council for a final vote at press time. Last fall, Cypress Real Estate Advisors sought an upgrade to Central Business District zoning to build a 250-foot condo tower, to be designed by Muñoz + Albin Architec­ture and Planning. (The contested 33-story 7Rio condo tower, at nearby Seventh and Rio Grande – now on hold – won CBD from council last year.) When 800 West Ave. came before council in November, members instead approved, on first reading, Downtown Mixed Use Condi­tional Over­lay zoning, which limits height to 120 feet. But according to unhappy project neighbor Ben Procter, retiring Council Member Betty Dunkerley then encouraged a developer-friendly "pass" on height-limiting compatibility standards triggered by nearby residences – a perk of CBD, not DMU. Definitive development guidelines for this peri­pheral urban district, rich in historic homes, are due later this year in the Downtown Austin Plan.

Tags: news, zoning

Today, the City of Austin offically selected Trammell Crow, Constructive Ventures, and USAA toredevelop the six acre Green Water Treatment Plant site into a dense multi-use extention of downtown. As part of the deal, the development team will pay the city $57.9 million for the right to develeop the prime site.

With the developer selected -- Trammell Crow proposed the most dense and ambitious plan for the site -- downtown Austin is now set for it’s most radical transformation in decades. With the redevelopment of the Green Site, as many as five high-rise buildings - some as tall as 40-stories -- will be added to the Austin skyline. In addition, a new retail district will connect the 2nd street district to the Seaholm development, creating a vibrant new downtown region which will draw many more residents, workers, and visitor downtown for shopping, dining, and entertainment.



As previously reported, the Trammell Crow proposal includes the following components:

- A 350,000-square-foot hotel and a 250-unit senior assisted living facility in addition to condos, apartments, offices and retail space.

- Five public squares could accommodate as many as 2,700 people.

- 5,200 new parking spaces

- The proposal includes an Austin Car Share program, bicycle bays, and electric refueling stations

- Restoration of the downtown street grid which will ease congestion and streamlie the flow of traffic into downtown

- The proposal offers to make 25 percent of its rental units affordable--defined at 80 percent of the city's median family income--and offered to make a donation to the city's affordable housing fund for every condo it sells, estimating that total donations could reach $2.5 million.

Here is a summary from the Statesman:

The Austin City Council on Wednesday unanimously chose Trammell Crow and its partners Constructive Ventures and USAA for the single biggest development project ever to take place downtown.The group beat four other development teams to win the right to negotiate with the city to buy and transform five isolated blocks of city-owned land bounded loosely by the Seaholm Power Plant and San Antonio, Fourth and Cesar Chavez streets into a residential, commercial and cultural hub.But a city official familiar with the proposals said the Trammell Crow team offered to pay $57.9 million for the six acres appraised at $55.5 million. The official requested anonymity because the official is not authorized to speak about the unsigned deal.Of the five teams, Trammell Crow proposed the biggest and tallest buildings, the most uses and the most parking for the current sites of the Green Water Treatment Plant and Austin Energy Control Center.Two weeks ago, members of the city staff announced that they had determined that the Trammell Crow plan was the best deal for the city.Their decision was based largely on financial information the city has refused to release, including: the proposed sales price for the land, sales and property tax projections, the financial backing of the developers, and the amount of public money needed to achieve the developers' plans. City officials say the information won't be released until the city has signed a deal with the selected developer, a process that could take more than a year.

Tags: new projects, news

Star Riverside, a four building condo complex on Riverside Drive just east of I-35, has officially commenced construction on the first 2 buildings. In this first phase, two 6-story lake front buildings will contain 64 large mostly 3/3 units ranging from 1,500 to more than 2,500 square feet with prices starting at $600k. The first two buildings are expected to be completed by Summer, 2009. A second phase will add 9 and 12-story towers with units as small as 600SF and starting around $350K.



Star Riversideis being developed by Constellation Property Group on the 4 acre former site of the Wellesley Inn & Suites just East of I-35. Constellation, an Australian firm which has developed some very cool modern projects (examples), has targeted a small number of cities in the U.S. for new projects. Austin is one of their targets, and Star Riverside is the first new project to break ground.

The first phase of the project features a relatively small number (64) of large units (1,500 - 2,500) in two buildings that sit as close as the rules allow to the lake. With prices starting at $600K, or about $400 / SF, the projects are mid-priced for downtown condo units. While the architecture is interesting and the projects looks to be modern, tasteful, and well-conceived, it remain to be seen whether this price point will succeed East of I-35 and South of the lake. Pluses include direct access to the hike and bike trails, a private dock (non-motorized water craft only on Lady Bird lake) and a planned swimming pool for residents.

In addition, Star Riverside is one of the first projects to transform the shores of Riverside drive on the south side of Ladybird lake. Constellation, and four other developers, are planning to build more than 2,000 luxury condo and apartment units near the shores of Ladybird lake. With close access to downtown, the South Congress entertainment district, the lake, and the hike and bike trails, the location is highly desirable yet less expensive (theoretically) than the city core. As part of thee projects, the Hike and Bike trail is likely to be expanded to fill long missing gaps between Congress Avenue and I-35 and with Star Riverside, the trail will be extended East of I-35.

Star Riverside was scaled back from 364 units to 201 units after the City planning commission denied the developers request for an impervious cover variance. Constellation had attempted to get a variance by building green roofs that were fully landscaped. The planning commission, however, has been very strict when it comes to variances for new buildings on the shores of Lady Bird lake.

The full and updated Star Riverside Profile can be found here. And below, here are additional images and renderings of the Star Riverside project:

Tags: new projects, news

Tonight, as the lucky future owners of 430 condo units at the 360 celebrate, the building has come alive with a 44-story vertical line culminating in a lit tower that is now the tallest structure in downtown Austin.

With a waiting list of 215 units, a list equal to 50% of the actual units in the building, the 360 has been an amazing success. Novare, the developer, hit the perfect combination of early timing, a great location, and an affordably-priced units.

With a major project completed, and a long list of people waiting for affordable downtown housing, it's a good time to take stock of other activity downtown:

- With their success with 360, Novare Group is on track for their next two towers -- Block 51 & 52 -- on the site of the downtown post office and an adjacent block on 5th street just North of Republic Square. These projects will add an amazing 900 condo units in 37 and 40 floor towers which should be completed by 2012. In fact construction will begin on the 37-floor tower in as little as 60 days. Novare is looking to repeat the model for 360 with a large number of affordably-priced units. However, with increases in downtown construction costs, the new Novare projects will inevitably be more expensive than the units in 360.

- The W Hotel & Residences, Four Seasons Residences, and Austonian -- all luxury projects -- are all proceeding quite well with construction as is the upscale Spring tower next to Whole Foods.

- The 34-story 7Rio Tower (AKA "CLB Unnamed" and "7th & Rio Grande" -- this is the first time we've heard this name) has bee so quiet that we had assumed it was dead (we moved it to "Pending" many months ago). According to the developers, they are still hoping to move forward and are aiming for a ground-breaking in Fall of 2009.

- 1115 Barton Springs, which have also labeled pending, is 30% slowed and slowly moving towards the 50% mark at which point they hope to begin construction. A smaller project with very expensive units, this project may have a difficult time getting built.

- Work has been suspended at La Vista on Lavaca at 1701 Lavaca St. for unknown reasons but is supposedly set to resume soon.

- According to the Statesman, groundbreaking on The Park, an office/condominium project at 801 Barton Springs Road, has been postponed to late 2009 for zoning reasons.

- The city is moving forward with the development of Seaholm and the Green Water Treament Plant - projects which will add a large number of affordable downtown units.

Tags: market analysis, news, 360

Over the last five years, Austin has experienced an unprecedented condo building boom. With many projects underway, the first two in the current wave are nearing completion.

This week, the 44-story 360 is throwing a massive party to celebrate the building's opening. Soon after the party, the first units will open. Over the next few months, the sold out project will be fully completed and all 430 units will be occupied. In addition to selling all units, the project's waiting list remains long. Like most projects, 360 is being completed sequentially starting from the bottom and working towards the top. As the building grows taller, work begins on the interiors of the lower floors. With it's opening, 360 becomes the tallest building in Austin - surpassing the height of the Frost Bank Tower by 50 feet.

In addition, The 23-floor Shore on Davis Street in the southeast quadrant is also nearing completion. Over the last few weeks, residents have begun to move in.

With the completion of 360 and the Shore, there will be as many as 1,000 new residents living in 622 new downtown condo units. While many additional condo projects are planned -- both of these projects are essentially sold out. If you are looking for a new downtown condo unit, at this point you will likely have to wait until the next round of units hits the market in 2009. That said, there are at least 2 listings on MLS for units in the Shore and likely a few more that will hit the market soon.

Tags: 360, news

This week, five proposals were released for the redevelopment of the sweeping Green Water Treatment Plant site between Seaholm and the Second Street District.

Nestled between Whole Foods, Ladybird Lake, Seaholm, Austin Music Hall, and the 2nd Street District is the City's oldest sewage treatment plant - the Thomas C. Green Water Treatment Plant - which began purifying water from Ladybird lake in 1925. The plant covers 6 acres across 4 city blocks. In addition to using a key tract of land to process water using 1920's technology, the plant also serves to disrupt the natural grid of the city -- it stops second street at its west end and blocks Nueces and Rio Grande from reaching Cesar Chavez.

The Green site offers an incredible development opportunity. With four downtown blocks, it is a huge chunk of land. The location is perfect -- it is on the lake and adjacent to both the hot second street district and the future Seaholm multi-use development. The site is free of Capital View Corridor restrictions, although portions of the site close to the lake are limited to 45 feet in height.

The plant, which is located between Cesar Chavez and Third streets between Seaholm and San Antonio is about to be decommissioned to make way for a new development. This week, the city released basic details on five proposals for redevelopment of the site. Once complete, the new development will likely add retail, housing, and office space while filling in the missing streets on the city grid.

Here are sample renderings from each of the proposals. It's an amazing set, they provide a vision of an important new urban district near the center of downtown Austin:


Larry Speck/PIRATE DESIGN


MITHUN


CATELLUS DEVELOPMENT GRO


BOSSE AND TURNER ARCHITECTS


COTERA AND REED ARCHITECTS

No matter who wins, here are some of the changes that are likely in store for the site when construction begins in 2010 or 2011:

- About 1,000 new apartments and condominiums including many affordably-priced units. While there are many condo and apartment projects currently under construction - and a few that have been cancelled -- demand remains very strong for central, affordable units. All proposals would include more than 100 units priced to be affordable for a family earning approximately $57,000.

- Multiple high-rise towers with downtown retail and restaurant space which will expand the thriving 2nd Street District.

- Lots of office space -- an important part of the downtown mix that has been largely ignored by the current building boom.

- The various proposals include many interesting elements such as a large downtown H-E-B., a movie theater, a major bookstore, a senior assisted-living center, a waterfront park, large hotels


Here is a summary of the individual proposals from the Statesman:

The proposals made by Catellus Development, Forest City, Simmons Vedder Partners, Stratus Properties, Trammell Crow and their respective partners have some things in common. But each also has elements unique to its plan. "Each one of the five has something that is different from the others, that's distinct to that proposal," Council Member Brewster McCracken said. "It's really amazing."

Trammell Crow and partners Constructive Ventures and USAA Real Estate Co. propose the biggest and tallest buildings with the most parking. Their plan also includes the most diverse uses, with space for a 350,000-square-foot hotel and a 250-unit senior assisted living facility in addition to condos, apartments, offices and retail businesses. Five public gathering spaces could accommodate as many as 2,700 people.

Stratus Properties' proposal includes a two-story H-E-B grocery store, with H.E. Butt Grocery Co. serving as a limited partner in the project.

"We think H-E-B being a full-service grocery store is something everybody can afford, it helps every one of those retailers in the area and it makes residential more viable," said the team's attorney, Steve Drenner.

A movie theater and bookstore would also help drive more traffic to the Second Street retail district.

Stratus and partner AMLI Residential are proposing the largest number of rental units, which they say would let them offer housing in a greater range of prices, and they plan to offer medical office space not found downtown. Canyon-Johnson Urban Fund, a partnership of Canyon Capital Realty Advisors and Magic Johnson Enterprises, is also a part of this team.

Simmons Vedder proposes a waterfront art park and four bridges over Shoal Creek, including two for pedestrians only.

This team, which includes Cotera + Reed Architects and Bury + Partners Engineering Solutions, also proposes to essentially turn the buildings into power plants by installing solar panels in the skins of its towers. It plans to use water collected from the condensation of air conditioners to flush the toilets.

Catellus Development has proposed a primarily residential project with 500,000 square feet of office space and nearly 200,000 square feet of retail. But the company is also offering to collaborate with city leaders and the community to develop a final master plan for the property that could differ significantly from its initial proposal.

"We're going to present something we think is really neat, dynamic, progressive and all of that, but with that said, if we are selected we're going to say, 'Let's go out and spend time and hear from the city what they really want and hear from stakeholders what they really want,' " Catellus President Greg Weaver said.

Forest City, which is partnering with Novare Group and Andrews Urban, emphasizes public spaces with a grand plaza at Second and Nueces streets complete with a fountain and transplanted moon tower. A grand staircase inspired by the Spanish Steps in Rome would connect the plaza to the trail along Shoal Creek, which would run from the Austin Energy site north of Third Street to Lady Bird Lake.

Tags: new projects, news, Downtown Life

Amid continuing market uncertainty, BartonPlace today announced that they have officially broken ground. With more than $45 million in earnest money on non-refundable contracts, BartonPlace is the latest project to confirm the strong market for well-conceived and affordable downtown housing.

BartonPlace, a 270 unit condo project on Barton Springs Road, includes one, two, and three bedroom units starting at $263,000 for 683 feet. With a prime location close to downtown and next to Barton Springs pool and park, the project will is in a great location and well priced. As we have seen with many of the downtown projects, the lower the price, the higher the demand. Projects like 360 with many units under $400K have sold very quickly. With construction underway, the project is expected to be ready for occupancy in late 2009.



Here is a summary from the Austin Business Journal:

A ceremonial groundbreaking was held today for the 270-unit BartonPlace condo project on Barton Springs Road.Constructive Ventures, the Austin-based group behind such developments as The Pedernales, 2124 and Saltillo Lofts, is developing BartonPlace in conjunction with local restaurateur Rick Engel. The project is going up near Engel's Austin Java restaurant on Barton Springs.Construction on the project designed by Dallas-based Boka Powell is expected to take 18 to 22 months.Perry Lorenz, one of the partners of Constructive Ventures, says the company has already collected $45 million in non-refundable earnest money contracts for units in the development."Our robust pre-construction sales show clearly that the condominium market in Austin remains very strong," says Lorenz. "The bottom line is that this is a great location in a solid market, and our team has the proven ability to deliver a unique, high-quality product here. BartonPlace will be a distinctively cool new Austin address."

Tags: new projects, barton springs, news

Last week, the city approved a master plan for the redevelopment of the Seaholm Power Plant site on Cesar Chavez near Lamar. The $117.2 million project, a partnership between the city and Southwest Strategies, will result in a 22-story hotel, 60 condo units, and 180,000 square feet of retail and commercial space. Between the initial proposal and final draft, the condo portion of the project was reduced from 80 units to 60 units.

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The 150,000-square-foot decommissioned power plant will be the centerpiece of the 7.8-acre property across Cesar Chavez Street from Lady Bird Lake. With offices, extensive retail, and more than 3 acres of open space, Seaholm will further shift the heart of downtown to the west. While downtown life used to center around 6th street between Congress and red river, the warehouse district, 2nd street district, and Whole Foods have shifted the balance. With Seaholm, the downtown action will increasingly be centered between Congress, Lamar, 5th, and Town Lake.

The most exciting part of the project is the redevelopment of the Seaholm facility itself. When complete, the art deco structure will include nearly 100,000 square feet of retail and restaurants. Construction will 2009, with the final project completed in 2011.





Here is a summary from the Statesman:

The Austin City Council approved the master development agreement for the $117.2 million Seaholm mixed-use redevelopment project today.The agreement says the development group Seaholm Power LLP, led by Southwest Strategies Inc., will pay $98.6 million or 84 percent of the cost of the project, while the city will pay $18.6 million. The redevelopment plan calls for a 22-story hotel, 60 condo units, 130,000 square feet of office space and 50,000 square feet of retail and commercial space. The 150,000-square-foot decommissioned power plant will be the centerpiece of the 7.8-acre property across Cesar Chavez Street from Lady Bird Lake.The city's contribution to the project, which will be raised through property and sales tax revenues, would pay for street and utility improvements, public parks and a parking garage. The city will continue to own the renovated Seaholm Power Plant.

Tags: new projects, news, seaholm

Congress Avenue was always meant to be the heart of Austin. Over the last 40 years, it's destiny as a retail center seems to have slowly slipped away. When the new Marriott replaces Tesoros Trading Company, very little retail will remain.

Today, however, Patagonia -- the upscale outdoor clothing company -- announced that it will open it's first store in Texas in a historic downtown building located between 3rd and 4th street on Congress Avenue. This is a bold move for the company and it is great news for Austin. With the opening of a new destination store, the Patagonia announcement should lead more businesses to follow with a Congress Avenue presence.

Prior to 1960, Congress avenue was the center of retail and commerce for the City of Austin. Over the last 5 decades, Congress Avenue has been in a steady state of decline as city residents increasingly looked to suburbs for shopping and commerce. Today, there are only 13 retail business on the prime central stretch between the Capital and the lake. While a handful of restaurants continue to survive, Congress avenue storefronts are more likely to be vacant or filled with offices than utilized for retail or cultural purposes. With the opening of the Austonoan, the Patagonia Store, the new Arthouse and the redevelopment the historic Yaring's department store on Congress between 5th and 6th into retail and commercial space, there is once again hope that the former glory of our most prominent thoroughfare may be restored.

Here is a summary from the Statesman:

Patagonia, the Ventura, Calif. active clothing and equipment retailer, plans to open its first Texas store at 316 Congress this fall. The 7,000-square-foot store will be the company's 25th location and will carry outdoor sports and lifestyle products tailored to Austin outdoor activities like trail running, bouldering, paddling and hiking/trekking.The store will open in the historic W.B. Smith Building. The company says it chose Austin as the location for its first foray into the Lonestar State because of the city's reputation among the healthiest and greenest communities in the country.

Tags: news

The Austin City Council took a first step today to extend the much-loved Hike and Bike Trail surrounding Lady Bird lake to close the gap between Congress Avenue and I-35 on the south side of the lake. Currently, hikers, bikers, runners, walkers, and other trail-goers must brave the shoulders of riverside drive for more than a mile to complete this part of the loop. With the extension, the hike and bike trail will now run uninterrupted from I-35 to Mopac on both the North and South shores of Lady Bird Lake.

The Hike and Bike trail is a key downtown asset and one of the biggest selling points of downtown living. Extending the trail has been challenging as much of the land is owned and occupied by various commercial and residential projects -- some built as close as 20 feet from the lake.

With today's action, the City council has hired a firm to design a 1.1 mile boardwalk over the water to extend the trail without requiring redevelopment of existing properties. The full project is expected to cost $10 - $15 million to complete.

Development around Lady Bird Lake has stirred significant controversy over the last few decades, staring with the development of the Hyatt many years ago and continuing with a number of recent condo projects proposed for the South side of the lake. In today's meeting the city also took action to review current waterfront development guidelines.

According to the Statesman:

A 15-member task force will soon begin evaluating the city's development regulations for properties along Lady Bird Lake in an effort to eliminate inconsistent and vague rules that have frustrated developers and citizens opposing their projects.Members soon to be appointed will include a representative from the Parks and Recreation Board, the Planning Commission, the Design Commission, the Downtown Commission, the Environmental Board, Save Town Lake, the Town Lake Trails Foundation and the Real Estate Council of Austin.The City Council also will select representatives from registered neighborhood organizations with boundaries abutting Lady Bird Lake and owners of property within the affected areas.The group is scheduled to submit a public report with recommended changes by early fall, and the City Council probably will hold public hearings and vote on the recommended changes in January.

Tags: news

Outside of Austin, the health of the U.S. condo market continues to deteriorate. It's well known that many formerly hot condo markets have come upon tough times. In markets such as Fort Lauderdale and Miami where flippers would by and sell units many times before projects were completed, the meltdown has caused investors to flee, leaving the remaining owner-occupants with an oversupply of units and very few buyers.

The condo markets in Florida, Las Vegas, and other markets are very different from the market in Austin, Texas. After huge run-ups in prices, the trend has reversed, According to the Wall Street Journal, "the median condo sales price in the Cape Coral-Fort Myers area of Florida fell 26% to $202,300 in the fourth quarter of 2007 from $273,400 a year earlier. . . Prices dropped nearly 20% in Tucson, Ariz., and 12% in the Atlanta area during that time, according to National Association of Realtors data. Inside the newly minted Quantum on the Bay in Miami, prices for two-bedroom units have fallen from the high $700,000s to around $500,000."

When prices drop this quickly at the same time as new projects are nearing completion, it creates a very painful market dynamic. When a buyer puts a 10% down payment on a future unit and then sees the value of the unit fall by 20% during construction, they walk away at closing to avoid future losses. The projects, in this situation, wind-up in a very precarious situation with as many as 40% of pre-sold units failing to close. If the developers are unable to pay back the construction loans, they subsequently lose all of their capital, default on the loans, and the projects often go bankrupt.

Will this happen in Austin? The answer seems to be "no." The markets where condo prices have imploded have featured a combination of three critical factors. The first is that all home prices -- condos and single family residences -- have dropped dramatically in value. This has not happened in Austin. In fact, in 2007, prime central areas increased in value. In area 8e which covers much of Westlake, for example, prices increased by nearly 15%. The second factor is that condo projects were massively overbuilt. While many projects are planned in Austin, not all will be constructed. The ones that do make it to the market -- while adding lots of downtown units by historical standards -- represent a miniscule percentage of Austin housing units. In fact, the 700+ downtown units that will be completed in 2008 are essentially sold out at this point.

The third major factor in the national meltdown is the current credit crunch. Today, there are few good options for people with poor credit, first-time home buyers who want to make small down payments, and anybody who needs a jumbo or interest-only loan. These trends effect us here in Austin in the same way they effect the national market. This is the primary reason that the Austin market has slowed down and price appreciation has paused in spite of a strong local economy and string regional job growth.

According to the Wall Street Journal, one of the big problems has been that developers in other cities started too many projects before the bust and failed to cancel or convert projects under construction to another use -- as rental units, for example. In Austin, virtually every project that started constrcution before the summer credit crisis is now sold out. Every project started after the crisis has been required to meet a very stringent bar for pre-sales. While no market is 100% safe -- Austin seems to be in excellent shape in comparison to many other major condo markets.



Hear is a summary from the Wall Street Journal (see the article here - subscription required):

It may seem surprising that anyone would want to add supply to a market whose troubles have been well-publicized for many months. But the economics of condo building encourage developers to bring half-finished projects to completion, even when prices and demand are plunging.Developers usually put up their own money for a project first, then spend borrowed funds. Once developers have spent their money and have commitments from lenders, they have a strong incentive to keep building to finish the project."These developers had millions of dollars tied up and they had them financed so they just moved forward," says J. Ronald Terwilliger, chief executive of Trammell Crow Residential, which builds many rental apartment buildings and also a few condos. "What they hope is that by the time the project is finished the market comes back."However, developers and lenders can more easily shelve projects that are still in the early stages. Many developments nationwide are being canceled, suggesting that by next year or 2010, the number of new condos coming onto the market may slow to a trickle.

Tags: market analysis, news

Arthouse, a downtown contemporary art museum located on Congress and 7th, today announced plans to remodel and expand their downtown galleries and educational facilities. According to Arthouse, "The plans -- developed by Lewis.Tsurumaki.Lewis, New York-based architects, the Board’s Building Committee and Staff -- will triple total space from 7,000 sq. ft. to 20,830 sq.ft."

Arthouse (formerly the Texas Fine Arts Association) was founded in 1911, and for more than ninety years it has advocated for the support of contemporary art in Texas, organizing exhibitions and presenting them in Austin and statewide. From its home, the Jones Center in downtown Austin, Arthouse pursues its mission: to promote the growth and appreciation of contemporary art and artists in Texas. The museum is well respected for its innovative exhibits and programs.

With the $6.6 million renovation and expansion, the project will “recycle” the current building which in the 1920’s was the Queen Theater, a key part of the Queen/Paramount/State theater “block,” and in the 1950’s became a Lerner Shops department store. Three new galleries, two artists’ studios, a 90-seat community/screening room, and a 5,500 sq. ft. rooftop space with a 33 foot x 17 foot movie screen will be added.

The highlight of the Arthouse project is the innovative architecture of the renovated structure. The striking building features randomly placed green translucent bricks, a modern awning reminiscent of the building's department store past, large glass windows including live projections on the upper floor, and a dramatic rooftop deck with an open air movie theater. The main space on the second floor also doubles as a large screening room.







The Arthouse project follows Austin Museum of Arts recent announcement of a new free-standing 40,000 square foot museum and a separate 425,000 square foot 30-story office tower on the current lot at West Fourth & Guadalupe. Together, these projects mark an exciting expansion of downtown arts options. With regular events, gallery openings, and now rooftop movies, these venues will continue to thrive as cornerstones of the emerging downtown cultural scene.

Tags: culture, Downtown Life, news

As the downtown development boom has driven downtown land and housing prices upwards, the calls have been strengthening for the City to take definitive action on affordable housing o ensure that downtown remains diverse and affordable to as a broad a segment of the population as possible. With the opportunity to control development of a huge swath of downtown land, the City is using its leverage to ensure that the project include affordable housing units.

As part of the initiative, the City is building a comprehensive affordable housing program around the large-scale development of the Green Water Treatment Plant between Seaholm and the second street district. The program has two primary components. First, to ensure that at least 10% of units are affordable to households earning less than $42,000 for a 1-2 person family (80% of the area median income), the City is reducing land prices and requiring developers that developers who want to participate in the project include affordable housing units. Second, the city will dedicate 40% of property taxes generated by the project to a housing fund which will provide subsidies to make additional units affordable.

The City plans to choose a developer in June.

Here is a summary from the Statesman:

City leaders have urged developers to build more affordable housing downtown with little success. Now, Austin plans to put its money where its mouth is with the upcoming sale and redevelopment of the Green Water Treatment Plant and nearby Austin Energy property.Blunting the developers' argument that land and building costs downtown are just too high, city officials plan to give them no choice but to include low- to moderate-priced housing in the redevelopment of the nearly four city blocks and as a result almost certainly will make less on the land sale."We're not in the business of making money," Council Member Brewster McCracken said. "We're in business to achieve public values and goals."The city also plans to directly subsidize additional units for even lower-income families and dedicate 40 percent of the property taxes generated by the redevelopment project to its affordable housing fund."I just think it's an opportunity to have much of both worlds: a lot of tax base delivered, hopefully a significant measurable one-time capital gains in the land sale and then a series of other community goals," Mayor Will Wynn said.

Tags: news, rental, affordable housing

Last April, developers announced a 4-story, 27 unit development on Barton Springs just east of Lamar adjacent to the train tracks, McDonalds, and Peter Pan Mini Golf. With pricing starting at $1,000,000, are original reaction was that "the project is a very odd combination of location and pricing that suggests a lack of experience in residential development." At the high end, the units were priced at $900 / SF making this the most expensive development in Austin.



Today we learned that ground-breaking for 1155 Barton Springs has in fact been delayed. With tough times in the credit markets, it is getting tougher to sell even the best conceived projects, While strong projects are finding success South of the river, they are succeeding by combining prime locations with prices far below those of the large downtown high-rises. 1155 Barton Springs attempted to combine ultra-luxury with a low-rise "B" grade location -- a tough sell in this market. While the views are great, top dollar projects need to be perfect, which is not the case with 1155 Barton Springs. While the project is delayed and not canceled, it is clear that the developers have a tough road ahead.

Here are additional details from the Statesman:

Groundbreaking has been delayed for the condo project called 1155 Barton Springs, which is destined to replace the long-vacant Treehouse restaurant and nightclub at Dawson and Barton Springs Road.Developers Elisabeth and Steffen Waltz and their partners had hoped to start construction on the project by the end of 2007. But yesterday, Elisabeth Waltz wrote in an email:“These times seem to call for a measured approach. It may take us a few more months to start construction; we will start when we have 50% or more of the residences sold. (Personally, having been a real estate broker for many years, I would prefer all of them pre-sold).”In addition, she said all floor plans are “custom-designed to reflect the buyers’ input and lifestyle. The reservations currently in place are the result of close cooperation between buyers, our office and the architects. This takes a bit longer that selecting a pre-designed unit but seems to really please the owners.”And having happy owners is especially important when they’ll be shelling out anywhere from $1 million to $4.3 million for the 27 units, which will range in size from 1,670 square feet to 4,500 square feet.And although it’s located next to a railroad track, the Waltzes have said the building’s concrete and sound-proofing insulation will minimize noise from the railroad. Waltz said in her email that, although she originally wanted the Treehouse building demolished as soon as possible, it actually has “proven useful.”” It gives me the opportunity to show the view from the first floor and also listen to the trains go by. Everyone is amazed on how little impact the train will have, if any. It moves very, very slowly in anticipation of the upcoming 90-degree turn across the lake.”

Tags: news

After seven years of planning and multiple iterations, the Four Seasons Residences will break ground this week. As we have seen with many of the recent downtown Austin condo projects, they are not truly real until construction begins. Having reached that milestone, the 32-story Michael Graves-designed tower is now expected to open to residents in 2010.

With 166 condo units priced from $500 - $750 per square foot and monthly condo fees of $0.61 / square foot, the Four Seasons Residences represents an ambitious super-luxury project for Austin. It was not too long ago that the Four Hotel Seasons hotel itself was almost a strange site in such a down-to-earth town. But times have changes and demand is strong. The project reports that they have received 10% deposits for 40% of the planned units. Interestingly enough, half of the buyers so far hail from outside of Austin -- a new twist for the emerging local high-end condo market. However, with 60% of units to sell, much work still lies ahead.

When combined with the Austonian and W, the Four Seasons Residences represents an entirely new ultra-luxury urban high-rise experience that has never existed and that will not exist in Austin until the first of these projects hits the market.



Here is a summary from the Statesman:

The Four Seasons Residences, one of downtown Austin's highest profile luxury condominium towers, will break ground this week, seven years after initial plans were thwarted by the tech bust of 2001.The newly designed 32-story tower will rise in the parking lot next to the Four Seasons Hotel overlooking Lady Bird Lake. The building's 166 residences will be priced from $400,000 to $4 million, with units from 880 to 5,500 square feet. Four Seasons will manage the building, which is expected to open in the first quarter of 2010 and become a landmark on the evolving skyline.The $125 million project is a venture between local developers Ardent Residential and Atlanta-based Post Properties Inc, the financier. Michael Graves & Associates Inc. designed the tower, which will have a terra cotta-colored brick base that will blend with the hotel, developers say.The first major sign of construction will come later this week when crews begin demolishing the hotel's 123-space surface parking, which will be redirected to an underground garage. The new tower will include five levels of above-ground parking.The construction entrance and staging area will be on Trinity Street to minimize disruption for the hotel, said Art Carpenter, a principal with Ardent Residential.

Tags: new projects, news, four seasons

The 2nd Street district is quickly becoming the heart of Austin. Even with just one real city-like block, the 2nd street district is full of life and energy --- both during the day and during the night.

One of the reasons for the success of the 2nd Street district is the centralized leasing strategy which groups all 44 retail locations in AMLI downtown, the CSC building, the Silicon Labs Building, and in City Hal under the control of a central leasing authority currently managed by AMLl. By centrally managing leasing, the district has been able to limit chain businesses while building a diverse collection of retail stores and restaurants that bring life to the neighborhood. As the district grows in size, it show only become stronger.

With the coming completion of the AMLI on 2nd rental tower between San Antonio & Guadalupe, a number of new businesses are soon to open on 2nd Street and in the surrounding blocks that form the district.


IMAGE: New AMLI on 2nd Tower Extends the 2nd Street District

The completion of the AMLI tower will bring 11 new retail businesses while bringing new life to the 7 businesses in the Silicon Labs building across the street. So far, 7 out of the 11 new retail locations in the AMLI Tower have been leased. They include the following new business which will soon appear on 2nd street. in fact, a couple—such as St. Bernard Sports—have already opened. The new 2nd Street businesses include:

- Z Pizza - An new downtown pizza restaurant
- Málaga - A Tapas restaurant which is moving from 4th street
- Minx
- La Condesa
- Kirk Furniture - A local vintage furniture store
- St. Bernard Sports - A Sporting Goods Store on 3rd street
- Dr Shane Matt -- Appears to be a dentist office

In addition, a few additional businesses are set to open soon throughout the district:

- Taste Select Wines
- Beyond Traditions Jewelry
- Mama Fu's - A local Asian Food Chain

With these additions, 42 of 55 of the retail stores in the 2nd Street District are now occupied. As new buildings such as the expansive Block 21 complex a W Hotel & Residences completed the street, the 2nd Street District will continue to shift Austin's center of gravity in its direction.

Tags: Downtown Life, news

It's been a while since Austin Towers has had the privilege of announcing and profiling a new downtown Austin condo development. Today, we are pleased to announce that Quorum Lofts, a new capital-area loft conversion project, has been announced with a target completion date of late 2008 or early 2009.

The new project will convert a 1964 office complex on 13th & Guadalupe -- 2 blocks West of the Capital -- into a dramatic modern
26-unit condo project. With the Capital-area location, the project (and the name) are targeting legislators and other Capital district employees who might be the excited by the idea of walking just a few hundred feet to work. The project is aiming for a crazy fast development timeline with delivery before the end of 2008. Although the developers hope to beat the rush of projects arriving in 2009, the deadline will be hard to reach unless they receiving zoning approval and begin construction quickly.

Units in the Quorum Lofts will be big - ranging from 1,450 to 2,450 square feet with prices starting near $500,000. The project will include a rooftop infinity pool and lots of nice features such as high 10 foot ceilings, granite counter tops,and jetted soaking tubs. We have posted a full profile here.



Here is additional information from the Austin Business Journal:

Local developer John Graham knows there are plenty of condo projects on the horizon for downtown Austin.But with most of the next set of big towers not scheduled for delivery until 2009, Graham sees big potential in bringing a development to market quicker -- and in a location just steps away from the Capitol.Graham's company, AustinPartners.net, hopes to get approval on a building permit in the next month for redevelopment of the property at 1300 Guadalupe St. The $10 million Quorum project slated for completion late next year would turn a three-story office building constructed in 1964 into modern, loft-style condos.Work is set to begin in January on the project that will add a fourth floor to the building and create 26 condos ranging in size from 1,450 square feet to 2,450 square feet and priced from $350 a square foot to $450 a square foot.The fourth floor will feature a spa and negative-edge, or "infinity," pool overlooking the Capitol. A glass elevator fronting Guadalupe will feature views east toward the Capitol. A second phase that would add structured parking and more units is also being considered.

Tags: new projects, news

For a while, 2007 seemed like the year of the downtown Austin condo project. Since last August, however, the market has changed. While most of the projects coming on the market in 2008 are sold out and many of the others are proceeding smoothly, at least three early stage projects for 2009 and beyond seem to have stalled.

As a result of slow progress, we have moved three projects into the pending stage until we receive clear confirmation that they are proceeding -- or if not -- that they have been postponed or cancelled. The delayed projects are:

5th & Congress
7th & Rio Grande
Residences at the Hotel Van Zandt

Now, with separate sections for active, pending, and cancelled projects on the Austin Towers home page, it will make it much easier for condo buyers to watch the projects that are most likely to be completed! In addition, we have adjusted the dates on a number of other projects to more accurately reflect current development timelines. If you know of any other delayed or pending projects, please drop us a note.

Tags: news

The Congress Avenue Marriott -- a 1,000 room hotel complex on 2nd and Congress avenue -- is the most controversial, and one of the least popular downtown projects. The project is best known for displacing Las Manitas and other local businesses. While the full details of the current plan are not known, 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 Congress Avenue Marriott, V. 1.0

The original plan for the project included 1,000 rooms across 3 separate Marriott-branded hotels in one convoluted multi-facted building. The second version of the project included two hotels in one building. Version 3.0, announced today, includes just one Marriott hotel with 1,000 rooms. With the changes and increases in downtown construction costs, the project budget has supposedly climbed from $185 million to more than $250 million.

The ironic thing is that the hotel is actually a good thing for Austin. A 1,000 room hotel will allow the city to book larger conferences and events -- bringing valuable tourism dollars and jobs to Austin. Their is a shortage of rooms downtown and a crazy large 1,000 room hotel can make a big difference. The problem is all in the developer's and Marriott's execution of the project: they seem to have no respect for downtown Austin and no interest in making it better place. If they hired an architect and surrounded the building with ground-floor retail, this would be a much more palatable.

Here is a summary from the Austin Business Journal:

Plans for a downtown hotel project at Second Street and Congress Avenue have changed yet again and will now feature a single, 1,000-room Marriott convention center hotel.White Lodging Services Corp. had originally planned to build three different hotels at the northeast corner of the intersection where Las Manitas café and other businesses currently stand. The proposed hotels included a 650-room Marriott convention center hotel, 200-room Renaissance Hotel and 150-room Springhill Suites hotel.Last summer the company switched course on the project saying it would build an 800-room convention center Marriott and 200-room upscale J.W. Marriott. The move was said to be due in part to greater demand for rooms dedicated to convention-goers and the growing market for upscale lodging downtown.This week White Lodging confirmed it will now build a single 1,000-room Marriott, but a spokesperson could not comment on why the group is altering course a third time. The most recent pricetag on the project puts the cost at about $250 million, though it's unclear if the new plan would alter that in any way.

We'll post new renderings as soon as they become available.

Tags: news, new projects

As expected, the Austin City Council has cleared the way for creation of a municipal parking authority that will build and operate for-profit parking structures in downtown and other high-density regions of the city. Proceeds from the garages will be used t support the hike and bike trails, bicycle lanes, and other alternative transportation projects. If parking is inexpensive, abundant, and well-integraed into new projects (underground!!!), than this decision will help the ity build a more vibrant downtown.

As we have written before, it is clear that parking is becoming a problem: the easier it is to park downtown, the more people will come downtown to shop, eat, live, work, and entertain themselves. High parking costs are already an obstacle to businesses thinking of moving into the city center. Many companies who can afford the rent are put off by the $150-$200 / month cost of providing parking for each and every employee. As parking costs continue to rise, it becomes a tax on every Austinite who wants to enjoy downtown, and it lowers the value of business and buildings who don't see as many visitors as they might if parking were cheap and plentiful.The result hurts the city by reducing sales tax and property tax revenues.

Here is a summary from the Austin Business Journal:

The Austin City Council approved a resolution to create a city agency that will build, finance and own structured parking garages in the city.The Austin Parking Enterprise will operate the parking garage planned as part of the Seaholm Power Plant redevelopment, and any publicly owned parking garage approved in the Green Water Treatment Plant redevelopment. The parking enterprise will consider expanding the supply of publicly-available parking in areas like downtown, the area around North Burnet/Gateway in the so-called "Second Downtown" area and in other transit-oriented developments near future commuter rail stops, and South Congress Avenue.The agency is intended to provide a dedicated long-term funding stream for planning and investing in pedestrian, bicycle and transit infrastructure, trails, and parking infrastructure after covering the costs of parking operations and maintenance. The agency would also make the city eligible for federal transit reimbursements and other state and federal grants.

As we have asserted, at $19,000 a space, parking is expensive to build. While the City clearly sees the parking shortage as a opportunity to add capacity and earn money for the city, this perspective may be short-sited. By focusing more on low cost parking and less on profits, the city could likely generate more revenue through sales and property taxes as well as hie prices for city owned land sold in the future.

Tags: news

Many of the swanky downtown Austin condo projects present prospective buyers with images of the actual view from the units they are considering. This is an amazing feat considering that many of these buildings have not even broken ground.

For example, here are two "views" from future units in the Austonian -- a 50+ story luxury project on Congress which is currently just a hole in the ground. The first image shows the West view from the 11th floor:



The second images shows the same view from a unit on the 54th floor:



Sooooo . . . . .what is their trick? How can they capture accurate views from hundreds of units in different positions on different floors. Do they use airplanes? Helicopters? No! They, like many condo developers across the United States, depend on Austin-based "Blimp Photo Services" to get these special images.



Here is the summary from the Statesman:

In recent years, Lockhart's 16-year-old Austin-based Blimp Photo Services business has been buoyed locally and nationally by the boom in high-rise condominium construction. He has taken panoramic aerial views of planned residential and commercial buildings in major U.S. cities and Canada. . . In Austin, he has photographed the viewsheds — the technical name for the views from a particular vantage point — for most of the downtown condominium projects that are under construction or are being planned. They include the Shore, Spring, the Austonian, the W hotel/condominium project and the Four Seasons Residences, a project that is expected break ground soon next to the Four Seasons Hotel.Brett Denton, a partner with Ardent Residential, which is developing the luxury Four Seasons high-rise, said Lockhart's photography "has been invaluable in helping our buyers better visualize the views from the various unit locations on different floors of our building."

While I am not sure how one gets started in personal blimp photography, it does serve an important market niche. For anyone who is planning to lay down big bucks on a high-rise condo that has not been built, it makes all the difference in the world to get a blimps-eye perspective of your future view.

Tags: news

Over the last year, a task force has been working on a plan to create an ambitious new destination library for downtown Austin, This flagship facility would incorporate world class architecture and a prime downtown location to create a dramatic new public space that will be a prime asset for downtown denizens.

The big question has revolved around location -- what is the best available spot to realize this vision? A new consensus seems to be emerging around a prime lake-front lot between Seaholm and the current site of the Green Water Treatment Plant. The location -- currently an electrical substation -- is adjacent to the beautiful art deco Seaholm power plant structure which is set for mixed use redevelopment over the next few years, The facility is currently being decommissioned in preparation for redevelopment. On the other side, the Green water treatment parcel is in the earliest stages of development -- initial plans have not even been drafted.


Graphic Source: Austin Chronicle

Here is a summary from the Chronicle:

"So many parcels, so many plans! For the new central library, the site now proposed and favored by library advocates and the city is the current site of the Seaholm substation, an Austin Ener­gy facility that fronts on Cesar Chavez, between West Avenue and Shoal Creek. Library advocates are excited about the location, where a stand-alone destination library (envisioned as world-class architecture) would overlook Lady Bird Lake. That signature structure would be flanked to the west by the redeveloped Seaholm Power Plant site and to the east by a four-block, high-rise redevelopment on the Green Water Treatment Plant site. Shifting the library from the Green site proper, said Council Member Brewster McCracken, will accelerate the project's schedule – with a design competition now slated for 2008. "They're a huge winner on this," he said of the library, which also gains parking and site preparation in the deal."

Tags: news

Prior to 1960, Congress avenue was the center of retail and commerce for the City of Austin. Over the last 5 decades, Congress Avenue has been in a steady state of decline as city residents increasingly looked to suburbs for shopping and commerce. Today, there are only 13 retail business on the prime central stretch between the Capital and the lake.


IMAGE: Congress Avenue was the heart of commerce in the 1940s

With the creation of the thriving second street district and the arrival of a new breed of downtown condo residents, Congress avenue may be on the upswing. Over the next few years, the Austonian and a sprawling multi-Marriott complex will link Congress Avenue to the Second street district and the convention center dining district.

Today, a first step towards the revitalization of Congress avenue was announced. After 9 years of closure, the historic Yaring's department store on Congress between 5th and 6th is being redeveloped into retail and commercial space -- bringing new life to a shuttered eye sore on a key downtown block.

Here is the summary from the Statesman:

The historic Yaring's department store on Congress Avenue, which has sat empty for nine years, is getting a dramatic redo.The building at 506 Congress Ave., which was constructed in the late 1880s, is best known for the store Jacob Schmidt opened in 1936. Yaring's, once a pillar of downtown commerce, closed in 1998. A forlorn "For Lease" sign has hung across its pink stucco facade for years.Now, the plan is to renovate it for retail or restaurant use on the first floor and offices on the second and third floors, said Kevin Kimbrough, vice president of Oxford Commercial, which oversees leasing of the building for owner Walter Penn.

IMAGE: Yaring's Department Store on Congress Ave to be Redeveloped

Tags: news

Over the next decade, the redevelopment of the Seaholm power plant and Green Sewage Treatment Plant will forever transform Austin's downtown. By reclaiming a dozen blocks in the core of downtown between Lamar and San Antonio, 1st and 3rd streets, these projects will provide a multi-use urban district that connects the second street district to Whole Foods.

With the development of retail, cultural institutions, office, hotels, and condo units, these developments are likely to shift the center of gravity for downtown Austin further to the West. In fact, the Seaholm development, with the redeveloped shell of the mammoth art deco power plant at its core, may become the new heart of downtown. The Second Street district, which now forms the Western edge of the downtown core, will be much more central once development reclaims the blocks to the West.



Here is a summary from the Statesman:

The city is taking the first steps toward redeveloping two of its high-profile downtown properties by rezoning them.The City Council will vote tonight on rezoning the Seaholm Power Plant site in preparation for a mixed-use project that will include 80 condos, a 160-room hotel, 100,000 square feet of office space and up to 60,000 square feet of retail.The city wants to rezone the property to allow building heights of up to 393 feet. The height is now capped at 120 feet.The City Council could also approve a resolution to begin the process of rezoning the site of the Green Water Treatment Plant.No plans for that site have been formed, but the city intends to release requests for proposals from developers early next year.

Tags: news, zoning, new projects

The shores of Riverside drive on the south side of Ladybird lake are about to undergo a dramatic transformation. Starting next year, four separate developers will begin construction on as many as 3,000 luxury condo and apartment units. With close access to downtown, the South Congress entertainment district, the lake, and the hike and bike trails, the location is highly desirable yet less expensive than the city core.

As we have reported, some of these projects have requested zoning variances to allow them to build closer to the lake than the 200 feet that the current rules allow. As a result of the zoning opposition, one developer has decided to redevelop the existing structures, some as close as 20-feet to the lake, as opposed to building new structures with a 150 foot set back. As part of the development, an extension of the hike and bike trails between Congress and I-35 and beyond is likely on the south shore of the lake.

The scope of the combined Riverside-area development is incredible: 3,000 units are now planned - more units than currently exist in all of downtown. While it will take many years for the projects to reach fruition, construction of the first projects will begin next spring.

Here is a summary from the Statesman:

The transformation of East Riverside Drive from a sprawling, well-worn, affordable enclave into a dense and upscale urban village will begin in earnest in the spring, when the first planned condo project is expected to break ground.Australian developer Constellation Property Group plans to begin work in March on its 225-unit project at the northeast corner of Interstate 35 and Riverside Drive. The Star Riverside condos, which will sell for between $400,000 and $1.2 million, will be broken into four buildings ranging from 60 to 110 feet high.The first owners are expected to move in in April 2009.Constellation faces competition from numerous condo projects planned in the vicinity.AMLI Residential hopes to break ground by the middle of next year on 375 luxury apartments on 11 acres at the northwest corner of East Riverside Drive and South Lakeshore Boulevard. In addition, Sutton Co. will build at least 45 condos. Construction could take up to two years.Cypress Real Estate Advisors also hopes to break ground next summer on a mixed-use development that will replace 800 aging apartments with as many as 2,500 apartments, condominiums and townhomes, as well as commercial, retail and live-work space on a 50-acre site on South Lakeshore Boulevard.

Tags: new projects, news

As downtown Austin continues to grow and thrive, it gets harder and harder to find a parking spot. For city planners, there are two ways to view this phenomena: either as a problem or an opportunity.

It is clear that parking is becoming a problem: the easier it is to park downtown, the more people will come downtown to shop, eat, live, work, and entertain themselves. High parking costs are already an obstacle to businesses thinking of moving into the city center. Many companies who can afford the rent are put off by the $150-$200 / month cost of providing parking for each and every employee. As parking costs continue to rise, it becomes a tax on every Austinite who wants to enjoy downtown, and it lowers the value of business and buildings who don't see as many visitors as they might if parking were cheap and plentiful.The result hurts the city by reducing sales tax and property tax revenues.

Other cities with emerging downtowns have overcome similar obstacles by building -- or providing incentives to build -- abundant free parking. In Fort Worth, for example. the Bass family which controls much of the land in the heart of downtown, built a successful pedestrian downtown by combining rapid multi-use pedestrian-friendly development with abundant free parking (and a private downtown security force). The combination worked and downtown Fort Worth has gone from an abandoned urban core to a vibrant 24x7 downtown in a little more than a decade.

Austin has a different plan. The City has proposed a Municipal Parking Authority which would build garages throughout downtown in partnership with developers in a joint venture that would bring in millions of dollars of parking revenue to the city. At $19,000 a space, parking is expensive to build. While the City clearly sees the parking shortage as a opportunity to add capacity and earn money for the city, this perspective may be short-sited. By focusing more on low cost parking and less on profits, the city could likely generate more revenue through sales and property taxes as well as hie prices for city owned land sold in the future.

Tags: news

Over the last few years, much of Austin's downtown has been redeveloped -- or planned for redevelopment.

Whole Foods has transformed an area of car dealers and auto body shops. The second street district transformed a region of old warehouse and industrial buildings. Seaholm power plant has been decommissioned and is now slated for mixed use development. Congress avenue is set to be transformed with a new hotel megaplex and the Austonian tower.

Nestled between all of these projects is the City's oldest sewage treatment plant - the Thomas C. Green Water Treatment Plant - which began purifying water from Ladybird lake in 1925. The plant covers 6 acres across 4 city blocks. In addition to using a key tract of land to process water using 1920's technology, the plant also serves to disrupt the natural grid of the city -- it stops second street at its west end and blocks Nueces and Rio Grande from reaching Cesar Chavez.



The plant, which is located between Cesar Chavez and Third streets between Seaholm and San Antonio is about to be decommissioned to make way for a new development. On November 29, the city will begin the process of soliciting proposals for redevelopment of the site. Once complete, the new development will likely add retail, housing, and office space while filling in the missing streets on the city grid.

The Green site offers an incredible development opportunity. With four downtown blocks, it is a huge chunk of land. The location is perfect -- it is on the lake and adjacent to both the hot second street district and the future Seaholm multi-use development. The site is free of Capital View Corridor restrictions, although portions of the site close to the lake are limited to 45 feet in height.

Over the next year, the City will seek and review proposals from developers interested in the site. Once a developer is selected, construction is expected to begin in 2010. Full build out of the site could take as many as 10 years. The land, which is currently owned by the city, is expected to sell for as much as $65 million (half of the proceeds will then be used for site improvements including reforming the street grid throughout the site). At that price, developers will need to build some tall buildings -- condo, rental, or commercial -- in order to profitably develop the site.

Tags: new projects, news

In an embarrassing reversal, the Monarch Condominiums has decided to convert from a 100% condo project to a 100% rental project. This follows the projects switch from rental to condo just 3 months ago.

At the time of the switch, the condo market was very strong and and the downtown rental market appeared unable to support a 305 unit high-end downtown project. As construction costs continued to escalate, the Monarch sought greener pastures in the condo market. With construction costs rising and rents determined by the market, the Monarch likely had no good options. With the building only months away from completion, they made a big bet that they could sell enough condo units quickly enough to make the bet pay off. With experience in the crazy Florida condo market where projects would sell out in days, they were optimistic that the Austin market could support quick sales.

It didn't work out the way they expected. The Monarch was likely hurt by three factors:

- It takes a long time to sell 305 condo units in Austin, even in good times. With just 150 single family sales in central Austin each month, the strongest projects sell 5-10 units per week. With limited time before completion, the Monarch didn't have enough time to sell enough units before completion. When the competition has beautiful sales centers and expensive virtual reality presentations, it can be hard for new projects to quickly catch-up.

- Projects designed for the rental market do not fare well in the condo market. Condo owners expect perfection -- buyers are always pickier than renters. Even with a discount, buyers tend to hold out for the perfect project.

- The project was a victim of bad timing. The credit markets imploded just weeks after they announced their intention to convert from rental to condo. While condo sales continue, the rate of sales was certainly much slower than they expected.

Together, these factors likely forced the developers of the Monarch into a very difficult position. With reports of strong pre-leasing at the new AMLI project on second street at rates of as much as $2.75 per square foot per month -- that's $2,750 / month for 1,000 SF -- Monarch must have concluded that the best shot of success was back in the rental market.

Here is the summary from the Austin Business Journal:

Burns says the decision to switch strategy wasn't at all a reflection of lack of demand for condo units downtown. "For us to have sold as many units as we did in the slowest selling season, I think says a lot," Burns says. "We simply didn't have the luxury of time on sales."The Monarch's units will range in size from 681 square feet to 3,530 square feet with lease rates starting at $1,650. The development will also feature more than 9,500 square feet of ground-floor retail space.Burns says taking Monarch out of the sales picture will likely make the downtown condo market rather tight in the near term. Developments that are near completion like The Shore and 360 are virtually sold out. And while a slew of new projects have been announced, and a few have broken ground, it will be late 2009 before the first of those comes to market.

While converting to rental is probably the best strategy given the market and their short time horizon, it was likely a very difficult decision. With approximately 60 units sold, they must now walk away from all of those contracts. While the rental market may be stronger by comparison, the project is likely looking for rents ranging from $1,650 to $7,000 or more per month. It will be hard to rent the high-end units as very few people are willing to pay those kind of dollars for downtown rental units.

While we've talked about overcapacity in the Austin condo market, the removal of 305 units in the Monarch from the market will have a dramatic effect. With the Monarch out of the picture, there will be very few new units hitting the market in the next year. With less competition, we should see strong sales at the remaining projects whose delivery will be staggered over the next three years -- at least they have plenty of time to sell out before their projects are completed.

Tags: news

John Wooley, the founder of Schlotsky's, this week announced plans for Zilker Place Condominiums, a new 74-unit condo development on a prime lot on Barton Springs road adjacent to Zilker Park. With quick access to the park and the hike and bike trail, three 5-story buildings will be constructed on a 2 acre lot that currently houses the restaurant Wanfu Too. Prices for the units will start at $300,000 for 900 square feet and will top out at $1.3 million for a 3,030 SF unit. The project will feature a central courtyard and pool, screened porches on many units, and protected views of Zilker Park.

Here is a rendering published by the Statesman:



When combined with Barton Place, a 270 unit project just a few doors down, it is clear that the area on Barton Springs between the park and Lamar is now in store for a radical transformation. With two large projects on the way, tax increases will certainly put pressure on the remaining restaurants and mobile home parks that form this prime area of the city. As the blocks develop, one of the most important elements -- one that is missing from current plans -- may be a requirement for ground-floor retail up and down the street. It would certainly be detrimental to Austin to lose a full district of iconic restaurants for a few mid-rise condo buildings.

Although Wooley originally hoped to build a much taller tower, he intelligently reformed the project as a 5-story venture that fits just within local zoning requirements. The local neighborhood association has provided vocal opposition to other projects. Given Zilker Place's location adjacent to the park, it would have been very difficult to secure political support for variances.

Tags: new projects, news

A movement is developing in Austin to link downtown zoning variances to "voluntary" contributions to community programs. While a density bonus sounds like a special gift to developers who meet the city's stated goal of a dense vertical downtown, in reality, it is the opposite. Density bonuses essentially charge developers for variances -- if they want to build taller, they need to pay for the privilege.

Here is a summary from the Austin Chronicle:

The incentives are the "bonus." For a developer, adding density is gaining additional project entitlements and additional value – more square feet, building floors (height), condo units, retail or office space to lease or sell. Zoning code limits the size of buildings; for example, in the Central Business District, entitlements are limited to an 8-1 floor-to-area ratio, or FAR. To reward developers whose projects advance urban planning and community goals, the city would grant them bonus entitlements in exchange for voluntary developer-funded community benefits – say, funding for affordable housing, parks, walkable streetscapes, and space for small, local businesses.

The thing that makes this a tough issue is the value judgment that it places on density: it assumes that high density projects are bad, and that developers should pay for the right to build bigger projects. The problem is that the Mayor and City Council's actions suggest that they believe the opposite to be true: they have worked hard to encourage high density projects for downtown.

The problem with density bonuses is that they don't seem to be supported by logic. The bonuses penalize dense projects, but do not prohibit them. If you believe that density is good, as much of our local elected officials seem to, then it doesn't make sense to put obstacles in place that will limit density. If you believe density is bad and that the current zoning rules are good, then it might make more sense to simply enforce the zoning rules and limit variances as opposed to allowing developers to pay for something which may not make sense for the city.

As we recently reported, Austin is not a dense city. While people disagree on whether they want tall buildings in Austin, density does have measurable benefits. For example, increased density is better for the environment, it enables mass transportation, and it provides for a vibrant downtown core with more residents and workers per square block. The alternative to density is suburban sprawl which has significant social costs. Additionally, dense projects provide significant tax revenue that can be used to fund important services. A large downtown condo project might contribute $50 million per year in property taxes which can pay for a wide variety of services. That revenue stream seems much more valuable than the hundreds of thousands of dollars in density bonuses currently being proposed by planners. (For more on the benefits of density, read this article).

In fact, the push for density bonuses is not really about density as much as it is about affordable housing. With rapid downtown condo development targeted toward high-end buyers and East Austin development replacing more affordable options, there is a growing consensus that action needs to be taken to ensure a diverse city center. The City wants to make sure that there will be affordable options for central Austin living. Unfortunately, the City's past efforts to achive this goal have not really worked. It's important to note that density is not the challenge to affordability. It makes perfect sense for the city to encourage bith density and affordable housing as important social goals.

When it comes to affordable housing, the big issue is cost. It is expensive to develop affordable housing when land and construction costs are skyrocketing. What the City likes about density bonuses is that they allow the city to tax large-scale projects to fund affordable housing. As reported by the Chronicle, this quid-pro-quo has not been a secret:

Last year, the City Council directed the Design Commission to recommend density bonus options. In the past several years, Downtown high-rise developers had been negotiating ad hoc exchanges of community benefits for neighborhood, commission, and council support of the variances needed to exceed existing entitlements. One early adopter was Constructive Ventures. On its Spring condominiums, the developer pledged to give $250,000 total for an affordable-housing fund and for park improvements along nearby Shoal Creek. This effectively countered Old West Aus­tin Neighborhood Association opposition; Spring received variances at council to build a slender 400-foot tower on land zoned Downtown mixed use (which sets a 120-foot height limit). That $250,000 was also the magic figure for the variance-seeking CLB Partners condo tower, T. Stacy & Associates condo tower, and Gables Park Plaza; the Novare/Andrew Urban Downtown post office projects got additional height for $200,000. (Austin has probably been leaving money on the table; by contrast, the density models suggested at right would generate millions in value for the community.)But everyone involved in all that one-off deal-making – including City Council – found the negotiations exhausting, time-consuming, random, and potentially inequitable. So council members began to push for a standard density-bonus policy.

As this debate evolves into policy, stakeholders will have to decide what is truly important for the downtown Austin. The recent report from the City's density bonus task force has expanded the debate by encouraging not just requirements for variances but also incentives for meeting other urban planning goals. If projects hide the parking garage or include a cultural institution or non-profit, they would be eligible for incentives. Certainly, it makes sense for the city to use every tool that they have to achieve their urban planning objectives. But the risk of density bonuses is clear: blocking variances is one of the city's only sticks, making it tempting for officials to penalize projects that would bring beneficial density in order to achieve other important objectives. If developers opt for lower density projects because the required concessions are too expensive, everybody will lose.

Tags: zoning, news, market analysis

Rumors have been circling for months that AquaTerra, a 163 unit 20-story project planned for Barton Springs road between Congress Avenue and south First street, has been having trouble getting off the ground. In fact, the building was supposed to be complete by 2008 -- yet construction hasn't even broken ground.

While we have not received any confirmation from the developers, we have heard from other sources that the project is in fact on hold and is unlikely to ever be completed. If true, this represents the first major cancellation of a downtown condo project. While it is easy to blame the project's demise on the credit liquidity crisis, AquaTerra has been in trouble for many months due to weak demand. Competition is intense to market units to downtown buyers --- projects that are not attractively positioned and aggressively marketed will have trouble getting noticed.

Here is what the project would have looked like:

Tags: news, new projects

The Austin City Council today approved the first phase of a plan to create a second "downtown" urban center in the region of north Austin near Braker and Mopac -- essentially the area surrounding the domain. As we have reported in the past, between now and 2015, one developer alone plans to build 50 new buildings with heights ranging from 2-26 stories (as tall as 310 feet). When complete, The Domain will form a second Austin "downtown" with as many as 82,000 residents and 50,000 daytime workers. To put these numbers in context, Mayor Will Wynn has working hard towards a big goal: getting 25,000 people to live in the real downtown by 2015, the same timeframe.

Here is the summary from the Austin Business Journal:

Austin's City Council gave final approval of phase 1 of the North Burnet/Gateway master land use plan, which will create a so-called second downtown in the area around the Domain luxury shopping center by 2035.The North Burnet/Gateway plan's vision is to ultimately create clusters of dense, mixed-use, pedestrian-friendly neighborhoods in the 2,300-acre area north of U.S. 183 bounded by Walnut Creek, Metric Boulevard, Braker Lane and MoPac Expressway.The final plan will allow developers to build denser than anywhere outside of downtown, as high as 15 stories or 180 feet, and up to 30 stories or 360 feet in areas closest to planned commuter rail stops.Phase 1 immediately designates a zoning overlay district in the area to allow vertical mixed uses and other urban design elements, and to preclude interim development not in concert with the plan.A draft plan of Phase 2 -- outlining ordinances implementing the plan -- is expected in six months, says Molly Scarbrough, a city senior planner. Final approval for the entire plan is expected in a year.

Tags: new projects, news, zoning

There has been lots of mixed news on the national and local real estate front over the last few months -- so it is a relief to see good news from BartonPlace Condominiums.

According to the developers, the project has taken $30 million in deposits on 61 of their 270 units. With strong pre-sales, the project has been able to secure financing for the project from IBC Bank in Austin -- clearing the biggest hurdle to a new project and setting them up to begin construction in the first quarter of 2008. The project is being developed behind Austin Java on Barton Springs road.



Here is the summary from the Statesman:

The BartonPlace announcement Friday comes amid a dramatically changed lending and credit environment nationwide, with experts predicting that some Austin condo developers who don't already have financing might find it much tougher to get, meaning some projects might not get built.But the credit crunch hasn't hurt the BartonPlace project. It is expected to break ground in March at 1600 Barton Springs Road, replacing the Shady Grove RV Park.Unit prices will range from $259,000 to about $700,000.Warshaw said BartonPlace sales are the strongest he and Constructive Venture principal Perry Lorenz have seen in any of their projects, which include four in East Austin. Austin Java co-owner Rick Engel also is a partner in BartonPlace, which will incorporate the Austin Java restaurant at the front of the 4.3 acre site.

Tags: news

The Austonian is going to be nice. At 56-stories, it will be the tallest building in Austin. In fact, it would be the tallest residential building in San Francisco. It has a beautiful pool and a dog park with a special doggie toilet.

These luxury features, however, are not free. Units in the Austonian start at $500K and top out at more than $7 million -- more than the selling price of almost any apartment or single family home in the history of Austin. On top of this, residents will pay the highest condo fees of any project in the city -- an amazing $0.64 per square foot per month which equates to almost $1,300 per month for a 2,000 square foot unit.

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. Prior to the introduction of the W and Four Seasons Residences, the highest condo fees in Austin were $0.40 per square foot and the average was a low $0.34. At $0.64, the fees at the Austonian are the highest in the city. According the sources, the $0.64 fee is actually a reduction from the $0.67 per square foot which was originally offered to buyers.

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
Five Fifty Five Condos.......$0.40
W Hotel & Residences.........$0.61
Four Seasons Residences......$0.61
Austonian.... . . . . . . . .$0.64
Average......................$0.42

Tags: news, austonian, condo fees, costs

As we have reported in the past, developers and the city have announced ambitious plans for the second phase of the Domain: the new mini-city rising off Mopac just north of 183. Between now and 2015, one developer alone plans to build 50, yes FIFTY, new buildings with heights ranging from 2-26 stories (as tall as 310 feet). When complete, The Domain will form a second Austin "downtown" with as many as 82,000 residents and 50,000 daytime workers. To put these numbers in context, Mayor Will Wynn has working hard towards a big goal: getting 25,000 people to live in the real downtown by 2015, the same timeframe.

The Domain capitalizes on a an ongoing trend in large scale development: Pleaseantville-like mini-cities that blend ground-floor retail with rental, condo and commercial properties on the upper floors. The goal is to create a disneyesque main street development that becomes a destination for retail and entertainment while making the development an attractive place to live and work. Envision multiple city blocks with street-side parking (and plenty of garages).

Today, the City of Austin took a step forward by approving phase 1 of a master plan for the area which will officially strive to create a second downtown on a 2,300 acre parcel adjacent to the domain by 2035.



Here is the summary from the Austin Business Journal:

City Council preliminarily approved phase 1 of the North Burnet/Gateway master landuse plan, which will create a so-called second downtown in the area around the Domain luxury shopping center by 2035.Final approval by City Council for Phase 1 is expected on Nov. 1.The North Burnet/Gateway plan's vision is to ultimately create clusters of dense, mixed-use, pedestrian-friendly neighborhoods in the 2,300-acre area north of U.S. 183 bounded by Walnut Creek, Metric Boulevard, Braker Lane and MoPac Expressway.The final plan will allow developers to build denser than anywhere outside of downtown and as high as 15 stories or 180 feet, and up to 30 stories or 360 feet in areas closest to planned commuter rail stops.Phase 1 immediately designates a zoning overlay district in the area to allow vertical mixed uses and other urban design elements, and to preclude interim development not in concert with the plan.

The initial Domain site consists of 57 acres and stands on the former site of Century Oaks Park, a multi-purpose recreational facility for IBM employees and their families. The park was so named for the century-old trees contained within. The land was purchased from IBM, and demolition of the park began in 2004.

Additional land for The Domain is being reclaimed from vacant IBM manufacturing and administrative buildings, as well as driveways and parking lots that were once part of the original IBM campus.

The developers were granted tax subsidies in 2003 from the City of Austin and Travis County. Total developer compensation from taxpayer money over the life of the agreement could reach $60 million. The developer keeps 80 percent of the city's sales tax for the first five years and 50 percent for the next 15 years. Plus, 25 percent of the property tax is rebated back to the developer for the entire 20-year period. The city of Austin expects to take in about $40 million in sales and property taxes over the 20 years of the incentive agreement.

Tags: news, zoning

Another Austin project -- the W Hotel & Residences -- took an important step forward yesterday with a lavish ground-breaking ceremony. Not unlike the Austonian which created a pile of dirt to be shoveled for the ceremony, the Block 21 development team and a world-famous basketball player and investor (Magic Johnson) used unusual guitar-shovels for the ground-breaking. The theme of the event, as far as I can tell, was "Keep Austin Weird."



Block 21, a former vacant lot in the heart of Austin’s Second Street District, is moving from planning to reality. Upon completion in early 2010, the new home of Austin City Limits, a 2,200 seat, state-of-the-art theater and music venue, will also incorporate the W Austin Hotel & Residences, a 35-story tower designed by Arthur Andersson with 196 condos, 250 guestrooms, spa and restaurant; plus approximately 47,000 square feet of ground and second floor retail. Unfortunately, the project will no longer contain the Austin Children's Museum which pulled out of the project -- an unfortunate loss for an otherwise great project. Supposedly, the developers made it very difficult for the Dell Children's Museum to affordably create the sort of space they needed for the facility.

The $260-million project is seeking Platinum LEED Certification for its implementation of green building techniques, materials and operational standards under the guidance of Gail Vittori, Co-director of the Austin-based Center for Maximum Potential Building Systems. There are only a handful of mixed-use projects and hotels in the world that have achieved LEED Platinum Certification.

Here is the latest rendering of the project which will clearly have a huge, positive impact on the second-street district:

Tags: news, w hotel & residences, block 21

When it comes to Austin condo zoning, there is one holy grail: there will be no exceptions to the current zoning rules which prohibit new construction within 200 feet of the shore of Lady Bird Lake. This simple rule, however, made for a difficult decision for the Planning Commission and the City Council.

CWS Capital Partners has purchased a plot of land with existing buildings that sit as close as 20 feet from the lake. Under current rules, they can redevelop these buildings, but they can not build new structures within the 200 foot easement. So, CWS asked the city for what seemed like a fair compromise: they would demolish the buildings close to the lake and extend the hike and bike trail by 1/3 of a mile in exchange for permission to build their towers 150 feet from the lake. Virtually political forces agreed that it was bad idea to allow any exception to the 200 foot rule -- the likely fear being that it would set a precedent for other developers.

Here is the summary from the Austin Business Journal:

The city's planning commission unanimously rejected California-based CWS Capital Partners' plans to build three highrise condo buildings as close as 150 feet from the shore of Lady Bird Lake.CWS had requested a variance to the Waterfront Overlay Ordinance that prohibits CWS from building within 200 feet of the lakeshore. In exchange for being granted the variance, CWS proposed to donate nearly 2 acres of waterfront parkland and extend the hike-and-bike trail by one-third of a mile along Riverside Drive.CWS can appeal the decision to the City Council, but CWS attorney Richard Suttle says the company will likely not appeal, given that four council members have already publicly expressed their opposition to the variance.If the variance request remains denied, CWS plans to build two highrises -- one 200 feet, the other 120 feet -- and redevelop dozens of apartments that sit as close as 20 feet from the lake shore to sell them as townhomes. Those apartments pre-date the 200-foot rule.

Tags: news, zoning

In April, Hyatt introduced a new boutique-style luxury hotel brand called Andaz. The first hotels, they announced, would be placed in world's most important "international cross-road" cities. And so far, three such locations have been announced. First was London. Second was midtown Manhattan. And the third location to be announced is— believe it or not — Austin, Texas.

The 210-room hotel is slated to open in 2010 as part of a $750M development on 32 acres formerly occupied by Concordia University. The site is located between I-35 and Red River near 32nd street. On top of the hotel will also sit 150 condo units ranging in size from 800 to 2,700 square feet. The building will be 182 feet tall and condo units will start at around $400,000 or a whopping $500 / SF for a non-downtown location.



Here is a summary from the Statesman:

The hotel, which is expected to open in 2010, will offer amenities such as a spa and fitness center and a 20,000-square-foot park-like roof that includes a cocktail lounge and restaurant.It will have appeal in Austin for its high-quality amenities but also will reflect the city's casual atmosphere, Sarwal said."The Andaz concept will integrate well with this prime location and Austin's cosmopolitan energy," Steve Haggerty, global head of real estate and development for Global Hyatt, said in a statement. "Together, we intend to attract customers looking for fresh, uncomplicated luxury."The hotel will be energy-efficient and will use ecologically friendly building materials. It will also offer organic food.

This is the second major project announced in the last 10 days after a multi-month lull in major announcements. While it's not downtown, it represents another major investment in central Austin and likely signals the creation of a promising new district.

Tags: new projects, news

The Downtown Austin Neighborhood Association (DANA) is holding its 4th Annual Downtown Living Tour Sunday, September 30th, from noon to 5 pm.  The event, which typically attracts more than 1,000 visitors, showcases homes and the benefits of living in downtown Austin. This year's tour will feature a combination of existing residences, units in new buildings, and sales models of upcoming developments. More than fifteen sites will be represented on the tour, including:

* 360 Condominiums
* Austonian
* Four Seasons Residences
* Spring Condominiums
* The 5 Fifty Five
* Sabine on 5th
* The Monarch
* 2nd Street Retail District
* Posada Del Rey
* Bridges on the Park
* Plaza Lofts
* Burk/Henricks House

The tour will start at noon at the lobby of the Carr-America building located at 300 West 6th Street (across from The Belmont). After the tour, enjoy happy hour (5 - 7 pm) prices on refreshments and food at Rio Grande Restaurant. VIP ticket holders will finish out the day with complimentary music, food, and drinks at the new Mexican-American Cultural Center from 7 - 9 pm.

Tickets are available through DANA's web site at www.downtownaustin.org/DLT.html.  Prices range from $15 for DANA members to $40 for non-members who attend the VIP party.

Tags: news

Between the credit crisis, skyrocketing construction costs, and the slowing real estate market, we didn't expect to see anymore downtown condo projects for a while. Today, however, we were surprised to learn of another downtown condo project announcement.

Austin's Fortis development today announced a new 20-story 200-unit condo tower to be developed on West avenue between 8th and 9th. While virtually no other details have been announced, the public details are enough to generate public opposition to the project. As the project is in a low rise area just north of sixth street, the project pushes the frontier of high-rise development.



The issue is that the location is zoned for buildings as tall as 60 feet -- far less than the 250 foot height of the proposed condo tower. This decision may be a tough one for the city council: they need to decide on the boundaries of Austin's high-rise downtown. In the projects favor, it is within two blocks of the Nokonah at 9th and Lamar, CLB's proposed 33-story super tower on 7th and Rio Grande, and another project on 6th and West. As the developer points out, it is one of very few downtown blocks free of capital view corridor restrictions.

Here is the summary from the Statesman:

A new condo high-rise is being proposed on West Avenue between Eighth and Ninth streets, but residents in the neighborhood on the western edge of downtown have registered their opposition.David Cox, president of Austin-based Fortis Development, is seeking a zoning change to build a tower of up to 250 feet, or about 20 stories, in an area where office zoning now caps height at 60 feet. The project would have about 200 condominiums plus retail space.The zoning request is scheduled to go before the city's Planning Commission on Tuesday, and the City Council would have the final say.If all goes as planned, the project would break ground in the fourth quarter of 2008, said Cox, who also is a vice president with Cypress Real Estate Advisors Inc., which has provided some financing for Fortis, his new development venture.

We'll post additional details and a full profile when we receive them!

Tags: zoning, new projects, news

While zoning variances seem easy to come by for most downtown condo projects looking for increased density or height, there is one request that remains sacred: building in the protected zone around Lady Bird Lake. Long-standing rules prohibit construction within 200 feet of the former Town Lake.

This is a problem for CWS Capital Partners which is trying to build three 17-story apartment and condo towers with 715 units on the south bank of Lady Bird Lake between Congress Avenue and I-35. The project has requested a variance to build 50 feet closer to the lake than current rules allow. The project has faced significant opposition and lost a crucial vote last week.

Here is the summary from the Statesman:

A developer seeking city approval to build three high-rises 50 feet closer to the shores of Lady Bird Lake than city rules allow struck out at the city’s Parks and Recreation Board meeting last night when board members recommended that the city should deny its request.Board members voted 5-4 against CWS Capital Partners’ request for a variance that would allow it to build 150 feet from the shore. The board’s vote will serve as a recommendation to the Planning Commission, which could hear the case as soon as September.More than 70 people attended Tuesday night’s meeting including many nearby neighbors and lake enthusiasts lobbying against the variance for the property located at 222 and 300 E. Riverside Drive.Board chair Linda Guerrero was one of the members who voted to deny the request.“There was an overwhelming concern regarding the project, and the citizens seemed to want to preserve the waterfront overlay (the current rules) overwhelmingly,” she said.

While CWS had been requesting a 150 foot variance, this was a major concession as their original plans called for an 80-foot setback. The project is built on land currently occupied by long-standing apartments built much closer to the lake. Prior to the release of the current rules in the 1980s (they were revised in 1999), buildings could legally be built much much closer to the shore (as close as 25 feet). If CWS does not receive approval for the current variance request, they have proposed building two 17-story towers with the legal setbacks and simply remodeling the existing apartments into town homes -- a legitimate exception to the setback requirements.

While it might make sense to replace old townhouses that are close to the lake with new buildings 150 feet from the lake, the political debate has focused on the integrity of the regulations. The lake is the crown jewel of Austin and the council has taken a "no exceptions" approach to preserve the integrity of the green space surrounding the lake. While it is easy to focus on the setback, an equally important goal of many residents is to extend the hike and bike trails to the east. In fact, one public interest group endorsed the 150 foot version of the CWS proposal.

While the zoning issues are settled for now, it does not seem like the city will get everything it wants: a 200 foot setback, demolition of the old apartments, and an extension of the hike and bike trails to the east. Hopefully CWS will take up the slack, striking the right balance between their development needs and the public interest.

Tags: zoning, new projects, news

BartonPlace, a planned 270-unit condo project behind Austin Java on Barton Springs Road, announced today that despite recent media attention and public speculation about whether the Austin condo market is being overbuilt, 300 people have already made reservations for a chance to buy a condo in their 270-unit project. They also announced that they will end the reservation project after tomorrow. After that, the only way to reserve a unit will be with a sales contract on any that do not sell in the pre-sales period. The project is expected to begin construction later this year.

The project includes one, two, and three bedroom units starting at $263,000 for 683 feet. With a prime location close to downtown and next to Barton Springs pool and park, the project will is in a great location and well priced. As we have seen with many of the downtown projects, the lower the price, the higher the demand. Projects like 360 with many units under $400K have sold very quickly.

The full profile is included here.

Project Rendering:



Approximate top floor view:

Tags: new projects, news

The 21c Museum & Condos moved a step closer to reality this week. The project, a 44-story tower which will combine a museum, hotel, and condos in a very attractive structure on Third and Brazos, received approval from the Austin Design Commission. Next, the Austin Planning Commission will review the project on September 11 before it's final review by the City Council. Given the buildings strong support, it seems to be well positioned for approval.

Here is the summary from the Statesman:

"The 21c museum, hotel and condo development slated for Third and Brazos streets will reach 44 stories into the Austin skyline, making it a dominant presence in the area of downtown east of Congress Avenue. The $200 million project will include 209 condos along with an upscale, 230-room hotel and contemporary art museum. The Design Commission voted unanimously on Monday to support the project, which has already garnered the approval of the city's Downtown Commission and support from the Downtown Austin Alliance."

The building is expected to begin construction in January and to be completed in 2010. The sales center is expected to open later this month.

Tags: zoning, new projects, news

The Austonian, a 56-story tower at 2nd and Congress that would become the tallest building in the city, staged an elaborate "ground-breaking" ceremony today to signify the beginning of construction. While the ground-breaking does hold real symbolic value, it did not involve much in the way of construction equipment. For the ceremony, a pile of dirt was constructed in the middle of the lot and then symbolically dismantled by a large crowd of well-dressed dignitaries in business clothing and matching white hard hats!

While the ground-breaking does not truly commit them to completing the project, it is a step in the right direction. The project team announced that they have lined up full financing for the project from Spanish sources. With the financing complete, they are now commencing construction. When the cranes go up, it will be a good sign that the building will truly be a reality.

The Austonian is an exciting project that is one of the most bold developments in Austin. At 56-stories and with 188 units starting at $500,000, the project is exclusively focused on the high end of the market. This is the segment that remains the most unproven downtown. The commencement of construction is a good sign for the Austin condo market, especially in the middle of the current credit crunch and ongoing subprime lending crisis.

Tags: new projects, news

We have lots of updates today on the state of sales at the leading downtown projects:

- The W Austin Hotel & Residences, which is currently building a sales center at Block 21 in downtown Austin, reports that about three-fourths of the 196 condo units have been reserved with a deposit. Construction of the building will begin in October.

- At Spring Condominiums just south of Whole Foods, 40% of the units are under contract. They report that they have sold out of all of the lower priced units. The building broke ground last month.

- At 360, the 44-story tower next to Austin Music Hall, 90% of the 430 units are under contract. The building has been very desirable because it is tall, well-located, and reasonably priced with virtually all of the units priced under $500K. The building has been under construction for a while, it is already approximately 30-stories tall.

- The 305-unit Monarch, also just a block from Whole Foods, is cryptically reporting that "there are prospective buyers for at least half of the units" although it remains clear whether these buyers have signed contracts.

- The Four Seasons Residences reported a month ago that 80% of the on floors 14-32 had already been reserved after just 6 weeks on the market. As a result, they have now opened the lower floors - floors 6 to 13 -- for reservations. They expect to begin construction later this fall

Tags: news

The Statesman ran a comprehensive analysis of the current condo building boom -- it was the lead story in today's paper. As part of the article, they interviewed many experts on the downtown condo market.

With the ongoing mortgage crisis, the billion dollar question is how the Austin condo market will fare. The answer: while the Austin market is one of the strongest in the country and condo demand remains strong, nobody really knows. The issue is that this is a new market: there is really no good parallel in the history of the city. According to the Statesman:

Forecasting demand for luxury condos is difficult, partly because there is little historical data for the fairly new phenomenon in Austin, said Eldon Rude, director for the Austin market of Metrostudy, which tracks the housing market.The next 12 months will be telling, Rude said. "We won't know how strong this market is until we see some of these projects get completed and begin to close units and move residents in."Their performance will depend on the economy, he said, "and it's impossible to forecast the state of our economy 12 months from now. "

As we have discussed, thousands of units are being planned for downtown Austin -- more than 1,000 are currently under construction. In fact, hundreds of units have been reserved in the last two months alone. For comparison, only 15 downtown condo units have sold on the resale market in this same time period. The difficult thing is that it is dozens of new projects which are being simultaneously introduced to the market. While demand has been strong for the prime projects, it can't be bottomless and nobody knows where the market ends.

One thing which is clear is that the market is stronger on the low end than the high end. The lowest priced units are moving very quickly while it remains to be seen how the high end units will fare. Like many other markets, it will likely be years before we know how many people want to live in a downtown condo and have the resources to afford it!

Tags: market analysis, news

July sales numbers are out and the news is very positive for central Austin. While the number of sales in July decreased for the city as a whole by 2% (even as prices increased 7% citywide) when compared to last year, the story is truly a tale of two cities: inventory is growing in the outskirts of Austin while demand remains very hot for central Austin. In central Austin, sales volumes are increasing, prices are going up, and inventory has been shrinking, It is a very strong market.

The best analysis of the market comes from Ki Gray and his blog:

If we look at the numbers, we saw a total increase in inventory of 1083 homes. If we break this down, we saw an increase of 1050 in outer Austin and an increase in inventory of 33 homes in central Austin. So this is an increase of inventory in the suburbs of 15 percent compared to an increase of 2 percent for central Austin.Another way to look at this is to look at months of inventory on the market:

All.........Outer Austin.......Inner Austin
3.57......3.91..................2.48

So in summary, the numbers for the Austin market are better than what we see in an average market (6 months of inventory) but we have slowed down a bit from the fasted pasted market that we saw last year. Also we are seeing central Austin again outperform the suburbs.

When analyzing these numbers, there are a few things to note. First, prices are increasing sharply in downtown neighborhoods: as much as 20-30% in the prime neighborhoods over the last year. Second, these statistics do not include the strong sales of downtown condos which are not listed in MLS. In fact, when these units are considered, it is possible that citywide sales actually grew in July. Finally, it is very important to note that these numbers do not reflect the dramatic changes in mortgage lending which occurred in mid- August. While iy will will take a few months to see the full effect of the current lending environment, it will be strong and negative. The good news is that Austin is better prepared than almost any other metro area: with a strong market and low inventories, Austin should ride the down market quite well.

Tags: market analysis, mls statistics, news

The Spring condos, an attractive 42-story green-colored building just south of Whole Foods, is under construction and selling quickly. According to the marketing center, construction began on July 24th and completion is expected Spring of 2009. As of today, 40% of units have already been sold.

We have learned of additional details of the planned project:

- 75’ lap pool on the 5th floor with an outdoor kitchen
- Private dining for rent with a full kitchen 
- Gas cooking 
- All 2 and 3 bedroom residences are corner units with 180 degree views
- 2 and 3 bedroom units come with 2 reserved parking spaces
- There is a rentable guest suite available to building residents
- Bosch appliances are standard
- Pets allowed
- Designed as a Green building

The latest renderings or shown below -- and we've updated the full AustinTowers profile on on the project.

Tags: news, new projects

In the midst of a rough week in the mortgage industry, it is worth taking a break from the doom and gloom to report that the Austin housing market has been relatively strong over the last year even as prices have decreased in other markets. Whatever does happen in the national economy, the strength of the Austin housing market means that we will fare better than most areas of the country where the housing market is much more tenuous.

According to the Austin Business Journal:

The cost of Austin-area homes has increased 5.6 percent in the last 12 months as prices on the national stage dropped 1.5 percent, a report released Wednesday shows.The median price for a home in the Austin-Round Rock metropolitan market stood at $186,600 at the end of the second quarter, up from $176,700 in the second quarter of 2006, according to the National Association of Realtors' quarterly housing report.

While this growth does not reflect what has happened over the last couple of weeks, and provides no guidance as to what will happen in the next couple of months, it is better to enter a difficult period from a position of strength.

Tags: news, market analysis

Construction has officially commenced on a five-year project to transform the Seaholm power plant and surrounding site near Cesar Chavez Street and Lamar into a large mixed-use project. The initial phase of construction, as expected, include mostly infrastructure enhancements and site preparation.



Seaholm is a 7.8 acre site, the main feature of which is the 136,000 historic art deco decommissioned power plant. The redevelopment project will add a 22-story hotel and condo project featuring 80 condo units atop a 160 room hotel. While the initial phase of the project will open in 2008, the Seaholm Plaza Hotel is not expected to open until 2010.

The project will also include offices, extensive retail, and more than 3 acres of open space. However, the most exciting part of the project is the redevelopment of the Seaholm facility itself. When complete, the art deco structure will include nearly 100,000 square feet of retail and restaurants.

More than anything else, Seaholm will further shift the heart of downtown to the west. While downtown life used to center around 6th street between Congress and red river, the warehouse district, 2nd street district, and Whole Foods have shifted the balance. With Seaholm, the downtown action will increasingly be centered between Congress, Lamar, 5th, and Town Lake.

Tags: new projects, news

The mortgage crisis is now front page news all across the United States. While conforming loans remain okay -- primary loans with values below $417K and full income documentation for buyers with solid credit - the investor market for everything else is in trouble. The result is a rapid rise in rates. As for the condo market, there will be very little effect for buyers of units that are less than $500K. For the high-end market, however, the market change is dramatic.

First, many buyers who qualified for loans a couple of weeks ago will not be able to get financing at all today. For those who can still get financing, rates have risen dramatically and are currently hovering between 7.5% and 8.0% for jumbo 30-year mortgages.

Bankrate.com reported today that:

Buyers of pricey houses are finding that money has suddenly become more expensive to borrow. Ditto for loan applicants who don't want to prove that they told the truth about their incomes.Rates on jumbo and Alt-A mortgages have zoomed upward since the last week of July, even as rates on conforming, fixed-rate mortgages slipped downward.The development is bad news for people who want to borrow more than $417,000 to buy a house or refinance a loan, or who can't or don't want to document their income. Rising jumbo rates make it more difficult to sell a house costing half a million dollars or more.

Over the last few months, hundreds of Austin buyers have put units under contract in new condo projects such as 360, the Four Seasons Residences, and the W Hotel & Residences. many of the buyers may no longer qualify for mortgages, or, may not be comfortable with the higher monthly payments now required. While every building is different, some projects do allow buyers to get 100% of their deposit back if rates climb over a certain threshold, one of the major buildings set this rate at 8%, or if buyers are unable to secure financing. With rates spiking, some buyers will be able to take advantage of these provisions.

For the majority of downtown units priced under $500K, including most of the units I buildings like 360, the current mortgage crisis is not catastrophic. While lending standards have tightened this week, most buyers with solid credit and documented income will still be able to qualify for the same traditional mortgage, just at a slightly higher rate.

For buyers who can afford the higher rates or our planning to pay cash, now might be a great time to negotiate with developers. If this crisis continues, it will be very difficult to sell many of the high-end units currently planned for downtown Austin.

Tags: news, market analysis, costs

Over the last two days, the Austin lending market has changed dramatically for the worse.

As the subprime lending crisis has evolved into a global problem—the bankruptcy of two large lenders seems to have tipped the scales — the market spotlight has turned a negative eye on every participant in the residential mortgage market. As the bad news has spread, lenders are dramatically cutting back on loans -- and rapidly raising rates at the same time.

The market changes in Austin over the last 48 hours are dramatic:

- A number of lenders, especially brand name lenders such as Wells Fargo and Bank of America have hiked jumbo (>$417K) mortgage rates from 6.8% to over 8.0%. Many other lenders seem to be following.

- Specialty loans -- especially loans that do not require income verification or documentation -- have quickly disappeared. These loans, which were commonplace a week ago, are now very difficult to come by. The same is true for loans that do not require a full 20% down payment.

- It has been reported that large loans (>$1.5M) are now very difficult to obtain, even for people in a very strong financial position.

These changes are bad news for buyers -- especially buyers who have placed deposits, are stretching their budget, and haven't locked in their final loan. We'll see how the marker evolves over the next few weeks. While anything could happen, most experts believe that the mortgage lending environment will get worse before it gets better.

Tags: news, costs

The Four Seasons Residences, the new condo project adjacent to the hotel, has released new renderings which provide a great feel for what the building will look like when it is completed. The renderings also show a slightly modified exterior design: more upper floors have been added with full glass walls. These replace the lower floors with smaller windows. The change is the result of the elimination of rental apartments which were initially planned but since have been replaced by additional condo units. The building is designed by Michael Graves, a world-famous architect.

The pictures show sample units as well as the rooftop amenities: a pool, yoga deck, and sun deck more than 30 floors above town lake. The pictures complement a very impressive "walk-through" video rendering of the project which can be viewed in the Four Seasons Residences appointment-only sales office.

As previously reported, the project recently opened the lower floors to prospective buyers after more than 80% of the units on the upper floors were reserved in the initial sales phase. The project seems to be on track to sell out by ground-breaking sometime this fall.




Read More...

Tags: four seasons, news

Austin's KXAN is reporting tonight that an acute shortage of cranes and crane operators is complicating high-rise construction in Austin. We've heard numerous reports from developers that a scarcity of construction labor -- and skilled general contractors and sub-contractors — is leading to escalating constructions costs, and higher condo prices in the end.

According to the story:

"There's no available operators in Austin right now," said construction worker Sam Buchanan. "They're all working." With a nationwide shortage, construction managers are paying more to keep cranes moving in Texas.

Over the last two decades, only a handful of tall buildings have been built downtown. As a result, local construction companies are only staffed to build a couple of major projects at one time. With more than 20 projects currently under construction or being planned, it is getting very difficult to find labor and equipment to build new projects. The result is simple: construction prices are going up and condo prices will likely follow.

Tags: news, costs, market analysis

While dozens of high rise condo projects rise from the ground in downtown Austin, interesting condo developments are also nearing completion in other parts of the city. One notable project is the SoCo Lofts which is nearing completion in the red hot South Congress district. This 69-unit condo development with ground-floor retail is located near Saint Edwards University. By building outside the core of downtown, the project has been able to hit a price point that is much lower than any current downtown project. With 616 SF units starting at $169,900 and 2-bedroom units starting at $289,900, the project is at least 25% less expensive than the new downtown projects.



The SoCo Lofts are not alone: a number of interesting projects are currently under development on South Congress, South Lamar, and on the East side across I-35 from downtown.

Here is a full profile of the project: Read More...

Tags: news