Ignoring Criticism, Travis County Buys Key Downtown Block

Ignoring public criticism and without a public process, Travis County closed on a prime downtown block just South of Republic Square in downtown Austin for $21.75 million. With this transaction, Republic Square is likely destined to become a dead block surrounded by government buildings.

As a result of the transaction, the prime park block is unlikely to have retail, restaurants, or adjacent residents. In evenings and on weekends the buildings will be dark and deserted. As we originally reported, the new 17-story courthouse will create a dead zone on one of the most important vacant lots in the City. With the County's record, the architecture will be uninspiring and won't be engaging. Republic park -- one of the few downtown open spaces -- will be cut off from the emerging second street district and historic warehouse district. The move will also remove a prime block from the tax rolls, limiting available funds for future downtown development.

While the lot purchase is a strong signal of the county's intentions, they do not have the funds to complete the project. As a result, the county must initiate a multi-hundred-million dollar bond election in order to fund the project. Hopefully, the project will be voted down at that point.

Significant opposition to the project sprung up as soon as the project was announced. A Facebook group dedicated to stopping the courthouse project can be found here. Travis County Judge Sam Biscoe publicly stated that he has not heard much criticism and seems open to hearing from the community on this issue (sam.biscoe@co.travis.tx.us).

New East Austin Condo Project Planned

If you take the new light rail from downtown, the first stop is at Plaza Saltillo on 5th and Comal just 8 blocks East of I-35. With a thriving bar and restaurant scene evolving on east 6th street and great new public transportation options, it's no wonder that developers are headed to the area.

Plaza Saltillo in East Austin
Plaza Saltillo Austin

Over the last few weeks, developers have announced preliminary plans to develop two new projects in the area.

First up is a 40-unit mixed-use condo development is planned at East Seventh and San Marcos streets. Earlier this month, the City Council unanimously approved a development bonus for the project in exchange for a commitment from the developer to provide affordable housing units as part of the condo project.

Nearby, a second project is in the works. On East 6th and Waller streets, a 40,000 square foot boutique hotel is currently on the drawing boards.

In the future, a 10 acre site owned by Cap Metro could also be sold for development.

As one of only five red line stops in the City of Austin -- and the closest stop to downtown, Plaza Saltillo is ripe for future transit-oriented development. With an evolving dining, shopping, gallery, and bar scene in the area, development is likely to greatly accelerate over the next few years.

Travis County to Ruin Republic Square

Over the last decade, the Austin Museum of Art has attempted to build a new downtown museum on the south side of Republic park multiple times. With a prime lot (now a parking lot) between 3rd and 4th street off Guadalupe, the museum aimed to be a cultural anchor for the second street and warehouse districts.

Today, Travis County announced that they have entered into an agreement to purchase the lot for $21.75 million to build a county courthouse. For downtown Austin, this is a disaster.

First, it raises the question of why the county would use tax payer money to buy one of the most expensive parcels in the city for a courthouse. Second, they seem ignorant to the fact that a county courthouse will kill the block. With government buildings on all sides of the square, there will likely be no retail, no commercial, and no residential uses. The new courthouse will create a dead zone on one of the most important vacant lots in the City. With the County's record, the architecture will be uninspiring and won't be engaging. Republic park -- one of the few downtown open spaces -- will be cut off from the emerging second street district and historic warehouse district.

While development options may be limited in today's stressed commercial lending environment, this is not a time that we need the county to step in. Hopefully, there is still time for the county to reconsider and find a different lot that better uses taxpayer money and that preserves what is evolving to be one of the most dynamic and high-potential corners of downtown.

Downtown Condo Sales Heat Up

According to the Austin Business Journal, sales at the newest downtown condo projects including W, the Austonian, the Four Seasons Residences, and Spring have accelerated in recent weeks with more than 30 closings in October for downtown condos

Sales at the five newest downtown condo buildings heated up in recent weeks, showing a continued trend since late summer that condos are selling well despite the sluggish housing market overall. According to the report, the W has now sold 60% of its 159 Units and BartonPlace has sold 54% of its 270 Units. SInce these units are sold directly by the sales offices, they do not hit MLS and are not reported in monthly MLS statistics.
Read More...

The Condo Mortgage Crisis

In the current real estate market, condo sellers need all the buyers that they can find. With mortgage lending requirements still incredibly tight, the pool of available buyers is much smaller than it was just a few years ago. Now, new rules for FHA loans targeted specifically at condos will further limit the options for condo buyers.

According to National Mortgage Professional Magazine, "Tens of thousands of condominium unit owners across the country may not know it, but their ability to sell or refinance could be jeopardized by a rolling series of federal government deadlines."

On December 8, as many as 25,000 condo projects across the country missed the deadline for FHA recertification and approval which is required for FHA loan approval through normal processes. According to the magazine, "What this means, lenders and condo experts say, is that unsuspecting unit owners nationwide could suddenly be cut off from an increasingly important source of mortgage money. In some markets where FHA-insured mortgages are used for 75 percent or more of first-time home purchases, condo sellers could be severely handicapped."

The only silver lining is that the FHA has liberally granted last minute extensions for many projects into next year. According to the story, "the eligibility issue dates from November 2009, when the FHA published new rules on the types of condo projects acceptable for mortgages on unit sales and refinancings. The rules were the outgrowth of a review that found that the FHA - which is essentially a government-owned insurance company - had approved thousands of projects over the previous two decades but possessed inadequate information on their underlying homeowners associations' budgets, legal documents, insurance coverage, renter-to-owner ratios, delinquencies on condo-fee payments, the amount of commercial space, and a variety of other characteristics that could affect a project's financial stability."

According to the HUD condo approval tool (here), the following downtown Austin condo projects have received approval so far:

- 360
- Avenue Lofts
- 904 West Condominiums
- Spring
- BartonPlace

Read More...

Exclusive: October Downtown Condo Sales

We've updated the AustinTowers | urbanspace Downtown Austin Condo Market Index for October, 2010. For the second month in a row, sales volumes fell far below the year ago level. With the sale of two high value units, however, average sales price spiked 28% to $571K.

Month
Sales
Avg. Price
$/SF
Avg SF
Avg Year
% Ask
ADOM
Oct-09

13

$444,173

$323
1,376
1988.461538
94%
151

Oct-10

8

$570,625

$295
1,834
1995
96%
74

Change

-38%

28%

-9%
33%
6.54
2%
-51%

During October, 8 units worth a total of $4.6M were transacted on the MLS: 5 less than during the same period in 2009. The % ask increased year over year to 96% of the listing price.

Over the last few months, the vast majority of transactions have been for units priced below $300k. In the first nine months of the year, only four units of 130 sold were priced above $1M. In October, however, two units sold for more than $1M -- one in Westgate and one in 5 Fifty Five. The higher priced unit sold for $1.425 million -- the second highest downtown condo transaction that we have on record. In counter to the long-standing trends, only one unit sold in October was sold for less than $300k.

So where were the units that sold? Unusually, none of the units were in 360. Three were in the Shore and two were in Milago.

As always, the results show the weakness of the MLS. While 8 units sold through MLS, additional units went ton sale at the Austonian, the Four Seasons, Spring and other new projects outside of the MLS. While the MLS numbers slid in October, the market has grown year-over-year in 14 of the past 16 months showing increasing strength. As we have noted, as more projects hit the secondary market, MLS transactions are expected to grow and diversify. In particular, we expect to see more expensive units sell on MLS v. through private transactions in the new high end projects, That said, it is difficult to know exactly what is happening in the broader market as sales office transactions are rarely included in the MLS numbers.

Over the next few months, the MLS will grow to become more representative as new construction inventory dwindles and resale units in the Austonian and the Four Seasons Residences begin to hit the market.

See the full index here.



Hello W Austin!

Tomorrow morning, the W Austin hotel will finally open.

The 251 room hotel and many of its key amenities will come to life tomorrow at 11:30AM with the rest of the project to be completed over the next few months. The hotel will open with a limited number of guests with public bookings beginning on December 12. The gym and spa will open at a later date.

The 36-story project, located at Second and Lavaca in the heart of the second street district, is the last of the major downtown condo towers to be completed.

According to the developers, more than half of the 159 units at the W Austin Hotel and Residences have already been sold. Although the condos have not yet been completed, the developers expect that the first residents will be able to move into their units in late January or Early February. Sometime after that the new Austin City Limits studios will be completed.

W Austin Hotel

Today, the entire staff of 300 employees treated the neighborhood to a 5 minute dance sequence performed to in front of the hotel on Second Street and Lavaca. With the W opening, the second street district will finally come to life. Like other W Hotels, the Austin W will likely become a thriving social hub at all hours of day and night.

Convention Hotel Math

Conventions are great for downtown Austin. They bring in people that fill local downtown restaurants, bars, and stores and they help local businesses thrive. They help keep downtown well-populated and busy, they create tons of downtown jobs, and their tax dollars help fund downtown improvements. With just a few thousand people currently living downtown, it's non-residents who keep downtown alive.

To attract conventions to Austin, it really helps to have large anchor hotels to hold all of the attendees. This is one of the reasons that the City originally spearheaded and funded the development of the Hilton --- currently the only downtown Austin convention hotel.

Now, the City Council is trying to figure out how to get a second downtown Austin convention hotel built downtown. The main issue is that the 800-room Hilton is not big enough to hold 1,000 to 3,000 attendee conventions which expect to place the majority of their attendees in 1-2 convention hotels. According to a city study, a second convention center hotel could generate as much as $1.9M in annual tax revenue and 680 permanent jobs.

In particular, the addition of a second convention-scale hotel would help the City attract the most lucrative mid-scale corporate and medical conventions, bringing bigger-spending convention goers downtown.

While the mayor has made bringing a second convention hotel to Austin a priority, no developers or investors have stepped up to provide resources as of yet. In the current commercial real estate environment, It is more than likely that the City will need to provide incentives or funding to making the project happen.

City of Austin: Dowtown Vacation Rental Investigation Under Way

The vacation rental industry is growing rapidly. Increasingly, downtown Austin condo owners are listing their units on services such as Homeaway as opposed to offering units in the traditional long-term rental market. With rates of $1,000 - $2,000 per week, a few vacation renters can make a condo owner happy.

But with short-term rentals come hotel tax obligations. Officially, any unit that is rented for fewer than 30 consecutive days and more than $2 / day (Really! $2 / day!) must charge and pay the full hotel tax. Currently, the hotel tax is a very significant 15% composed of two portions: 6% to the state and 9% to the city. On a $2,000 weekly rental, that is a $300 tax bill.

The City currently believes that many downtown Austin condo and home owners are not paying the tax that they owe. In a tight budget year, they are looking for additional sources of revenue. As a result, the City's audit department is currently conducting an investigation of how much unpaid bed tax is being generated through short term vacation rentals. Once the results of the probe are in hand, the City os evaluating a code amendment related to short-term residential rentals. Supposedly, the probe was initiated after a series of neighborhood complaints from Austin residents opposed to neighborhood vacation rentals.

For most downtown condo owners, the tax doesn't matter as very few units are currently listed on the vacation rental market. For those who do rent units, the tax is significant. For many, awareness of the charge may be the key obstacle to compliance. We'll see how this investigation evolves. . . .

The Next Wave of Rainey Street Development

The neighborhoods with the most character are often historic and central. For this reason, it was probably inevitable that the Historic Rainey Street neighborhood in the heart of downtown would become a very cool district of restaurant and bars.

First came Lustre Pearl and Clive. Then, the G' Raj Mahal Cafe. Now, three more houses are entering the process to become restaurants or bars. Since the entire district is registered as a National Historic District, all such requests must pass through Austin's Landmark Commission.

The Rainey Street District is located between the convention center and the lake just West of I-35. With the Shore, Milago, and Legacy on Town Lake all in the district, hundreds of residents provide a foundation to bring the neighborhood to life.

Here are some of the destinations currently anchoring the emerging Rainey Street district:

Clive
Clive Bar Austin

Lustre Pearl
Lustre Pearl Bar Austin

G’ Raj Mahal Cafe
G Raj Mahal Cafe Austin Rainey Indian

Mexican American Cultural Center
Mexican American Cultural Center

BartonPlace: 57% Sold

We received an update from the head of sales at BartonPlace. According to the team, the 270 unit 6-story project is now 57% sold. This leaves 116 units left to sell.

A couple of readers noticed that a small number of BartonPlace leases were hitting the MLS and asked whether these were being offered by the sales office. We checked and the answer is "no!" --

As is often the case, buyers have closed on their purchases and are leasing them on the open market. Some of these are likely investment purchases. Others are being leased by buyers whose lives and plans may have changed since they originally committed to a unit.

Currently there is just one 743 square foot 1/1 being offered for lease at $1,900 / month. 8 additional units are currently being offered for sale on MLS at prices ranging from $367K to $878K.

Here are pictures of the unit that is currently for lease:
Barton Place Austin Condo View
Barton Place Austin Condo

New Movie Theater to Open Downtown

One of the things that has been missing from downtown is a full-time first run movie theater. This is about to change in a big way.

A new maquis will soon rise on Second Street between BoConcept and Malaga with 4 new theaters taking over the second floor of the AMLI 2 rental tower as well as a balcony with a nice view of the second street action. The new 8,000-10,000 square foot "Violet Crown" art house theaters will feature everything that movie lovers could want including:

- Digital projection
- A full bar and cocktail lounge
- Gourmet concessions
- Free validated parking
- 4 intimate 50-seat theaters
- Stadium seating
- Wide range of food options that can be ordered in the lounge and consumed in the auditoriums but without alamo-style theater food service
- Ability to reserve specific seats

Violet Crown 2nd Street Movie Theater Austin

A movie theater such as the Violet Crown will be a great asset for downtown -- and the 2nd street district in particular -- as it will Read More...

Strong Job Growth will Help Austin Real Estate Market

Job growth is a requirement for real estate appreciation in a normal market. While this still isn't a normal market, the latest Central Texas employment numbers provide hope that normalcy may someday return.

According to the Texas Workforce Commission, the Austin-San Marcos-Round Rock metropolitan area added 17,300 jobs over the last 12 month period. This 2.3 percent increase dropped the unemployment rate from 7.2% in August to 6.8% in September. In comparison, the national unemployment rate is still 9.2% and the Texas unemployment rate is 7.9%.

According to the Austin American Statesman, "From August to September, the area brought on 2,700 positions, primarily from government adding 4,400 jobs. Government employment was up about 3,000 jobs year-over-year in September. Education, health, leisure and hospitality were the only other sectors to add jobs from August to September, adding a cumulative 1,400 jobs. Professional and business services shed about 1,100 positions during the same one-month period, the largest decrease that period."

Austin has been very lucky. Our real estate dip has been relatively minor. Read More...

Exclusive: Strong August but Weaker September Downtown Condo Sales

We've updated the AustinTowers | urbanspace Downtown Austin Condo Market Index for August and September, 2010. After 14 months of year-over-year sales gains, sales volumes in September dropped to below their year ago level.

Month
Sales
Avg. Price
$/SF
Avg SF
Avg Year
% Ask
ADOM
Aug-09

14

$252,029

$255
986
1987
93%
57

Aug-10

16

$330,088

$298
1,056
2004
94%
57

Change

14%

31%

16%
7%
16.07
1%
0%

Month

Sales
Avg. Price
$/SF
Avg SF
Avg Year
% Ask
ADOM
Sep-09

15

$258,993

$307
845
1986
91%
81

Sep-10

12

$221,745

$282
786
1993
96%
113

Change

-20%

-14%

-8%
-7%
7.13
6%
40%

During August and September, 28 units worth a total of $7.9M were transacted on the MLS: 1 less than during the same period in 2009. While volume and price both increased in August and then decreased in September

Read More...

Seaholm Redevelopment Goes to Council Vote

It was announced in May that Constructive Ventures plans to build 425 new condos in two 400-500 foot towers on an Austin Energy site just West of the 360 condo project downtown. This week, the City council's draft agenda for the 10/14 meeting includes an agenda item to review the master development agreement for the site.

The new project by the developers of Spring would include 425 condo units and 15,000 square feet of retail in two point towers on a 1.7 acre site adjacent to 360 and the decommissioned Green Water Treatment Plant downtown. The project would cost $220 million and construction would begin in 2013.

Seaholm  Condo Towers Austin

According to the Austin Business Journal, "unanswered questions regarding the cost for Austin Energy to relocate its control center from the Seaholm redevelopment area stalled the residential condominium project planned to replace it. Austin City Council members questioned Read More...

Updated: Building-by-Building Monthly Condo Fees

Condo fees fund the daily operations and maintenance of most condo buildings. They cover security, landscaping, cleaning of common area, common area energy use, maintenance, and other key building functions. In addition -- and this is very important -- a portion of condo fees are held by the building as reserves to fund major maintenance projects. On average, our research shows, condo unit owners can expect to pay $0.44 / SF / per month or $440 in monthly condo fees for a 1,000 SF unit.

An important thing to note is that condo fees are not fixed forever --- they rise over time. Some buildings -- such as the Five Fifty Five Condos and the Sabine -- have seen significant increases over the last year in the price per square foot rate charged. Since the last time we calculated fees, the average fee has increased from $0.41 to $0.44.

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

The prices in new buildings that we have looked at are surprisingly varied -- they range from $0.31 / SF / Month to $0.62 / month -- an amazingly broad range.

Here is our updated list of condo fees by project:

Fee by Building - - - - - $ / SF / Month
Milago
.......................$0.31
Avenue Lofts
.................$0.33
360
..........................$0.36
The Shore
....................$0.37
Spring...................... $0.38
Barton Place
................ $0.38
Brazos Place
................ $0.40
Plaza Lofts..................$0.42
The Sabine
...................$0.45
Five Fifty Five Condos
.......$0.46
Austin City Lofts............$0.48
W Hotel & Residences
.........$0.60
Austonian.... . . . . . . . .$0.61
Four Seasons Residences
......$0.62
Average......................$0.44

389 of 736 Units Sold So Far in Spring, W, Austonian, and Four Seasons

There are four downtown buildings -- Spring, the Four Seasons Residences, the Austonian, and the W -- where you can still find new condo units (+ BartonPlace which is just across the lake). When these buildings are sold out, it will be a long time before new downtown Austin condo inventory appears.

Today, the Statesman reported previously unpublished data on current sales for the four remaining projects. What the developer-provided data shows is that 389 of 736 available units in these four new projects are currently sold or under contract. While this 53% sales rate means that there are still 347 mostly high-end units left to sell, the numbers do represent amazing progress for the downtown condo market.

During the last 12 months, 165 units were transacted on the MLS. In comparison, the 389 units sold through private sales represents more than 2x last year's complete downtown Austin condo sales volume. Since new unit sales in these four projects are not included in the MLS, it's been very difficult to gauge the full scope of downtown Austin condo sales, especially for units priced over $600,000. While very very few units priced over $1 million have sold on MLS, the average unit listing price for the four new buildings is greater than $1 million. What the new data shows is that sales have been relatively strong and likely accelerating as the project's neared completion.

Here is the developer-reported sales by project:

Spring: 158 / 247 (64%) units sold or under contract
W Residences: 84 / 159 (53%) units sold or under contract
Four Seasons: 77 / 148 (52%) units sold or under contract
Austonian: 70 / 178 (39%) units sold or under contract

With this new data, there are a few key observations: Read More...

WSJ: Shanghai or Austin, Who's Sexier?

The Wall Street Journal's China Daily published a very unscholarly analysis of two cities recently recognized for their sexiness in comparison to their national peers. In the U.S.A., Austin received top honors. In China, Shanghai was on top. Having just returned from Shanghai, it is an amazing place --- a super modern city of just under 20 million people. This may be the only time the two cities are compared in such an article!

Shanghai, China (Photo Copyright 2010 Paul J. D'Arcy)
Shanghai China Downtown 2010

Here is the "report" from the Wall Street Journal:

Tall buildings, big events, modernity: The characteristics of a sexy Chinese city.

Condom sales, birth rates, transmitted disease and toys: The determinants of a sexy U.S. city.

In unrelated surveys released this week, Shanghai was named China’s sexiest metropolis (in Chinese) while Austin, Texas was
crowned with that honor for the U.S. Read More...

La Vista on Lavaca: The New Intel Shell

It's official: the planned "Fondren Building" (AKA La Vista on Lavaca) -- a nine-story residential mixed-use tower consisting of 19 condominiums on the top four floors, a three-floor Executive Business Center, and first floor restaurant -- has been abandoned mid-construction by its new owners. As a result, a 9-story concrete shell now sits idle on Lavaca street near the capital.

According to the Austin Business Journal, the owners of the Fondren have filed for bankruptcy claiming 13.8 million in debts and $9.3 million in assets. In August, the partnership asked a judge for permission to sell the building to a New York investor for $8.4 million. Apparently, this deal has
fallen-through leaving the developers with few options for liquidation.



Complicating efforts to sell, the Austin Business Journal reports that "Travis County, which is owed $175,950 in unpaid property taxes, and Dallas-based Precept Builders Inc., which is owed $3.7 million, filed objections after the request to sell."

The 8-year-old project has had multiple owners and a sorted history. Read More...

Exclusive: 30 Month Milago Sales Analysis

Over the last 30 months, 344 downtown Austin condos sales have been recorded on the MLS. Of these sales, an amazing 52 have been in the Milago -- more sales than any other downtown Austin condo project (360 is #2). Of course, MLS statistics exclude sales that aren't listed on MLS -- including almost all sales by the developer. As a result, the MLS statistics provide a clear picture of resale units but not initial sales.

When looking at resale volumes and quantities, the 52 Milago sales provide an interesting picture of the downtown Austin condo market over the 30 months. During this period, Milago sales volumes have decelerated from 2.1 sales per month to 1.9 sales per month and prices have dropped from $322 / SF to $266 / SF. The price drop occurred almost entirely in 2009. Fortunately for owners, prices have been relatively stable going into 2010.

Milago Sales Analysis: Sales Velocity

Year

# Sold

Units / Month
Avg SF

2008

25

2.1
1041

Read the full analysis here:

Read More...

Downtown Apartment Market Softening

Over the next year, the central Austin rental apartment vacancy rate is expected to jump significantly from 3.6 percent to 9.4 percent.

This negative trend is in stark contrast to what is happening in the rest of the City, where employment growth and migration are reversing the current apartment supply glut. According to market data from Marcus & Millichap Real Estate Investment Brokerage, citywide apartment vacancy rates are expected to drop 9% this year. In hot areas of the city -- such as the south central area near South Congress Ave, vacancy is expected to drop significantly as more units are absorbed.

Across the city, rents dropped 3% last year as more than 10,000 new units hit the market. This year, rents are expected to increase slightly (2.4%) as only 2,860 new units are expected to hit the market.

In downtown Austin where rents are highest, tight spending is limiting absorption of new units. Central Austin apartment rents average $1,014 -- significantly higher than the citywide average of $864.

According to the firm, "the city is forecast to add 19,100 jobs this year, prompting a rush of new residents and a rise in demand for residential rentals. At the same time, the apartment development pipeline has drastically thinned out, with 2,860 new units expected this year, down from 10,340 in 2009."

With a strong supply of downtown apartments, potential renters will be able to negotiate better rents and more attractive incentives, especially for higher-end units.

Exclusive: Summer Downtown Condo Sales Stay Strong

We've updated the AustinTowers | urbanspace Downtown Austin Condo Market Index for June and July, 2010. With the new results loaded, we are pleased to announce that year-over-year sales volumes have increased for the 13th month in a row. In addition, more expensive units are starting to sell, prices are rising, and average days on market is dropping. The downtown Austin condo market continues to gain strength as it enters it's second year of growth and recovery.

Month
Sales
Avg. Price
$/SF
Avg SF
Avg Year
% Ask
ADOM
Jun-09

8

$431,738

$292
1,400
2000
87%
117

Jun-10

18

$387,241

$324
1,160
1999
95%
100

Change

125%

-10%

11%
-17%
-1.00
9%
-15%

Month

Sales
Avg. Price
$/SF
Avg SF
Avg Year
% Ask
ADOM
Jul-09

12

$265,450

$265
1,021
1987
97%
88

Jul-10

14

$338,192

$298
1,121
1999
96%
74

Change

17%

27%

12%
10%
12.00
-1%
-16%

During June and July -- key summer selling months -- 32 units worth a total of $11.7 million were transacted on the MLS: 12 more than during the same period in 2009. In addition

Read More...

Swim! Pictures of Downtown Condo Pools

Ten years ago, if you wanted to live downtown in Austin in a place with a nice pool, your options were slim. Now, most of the new projects feature resort-like pools which are key selling points for the buildings. In the future, nice pools will likely be standard on new Austin condo buildings. As the new generation of resort-like projects comes to fruition, it's possible that units in buildings without pools with sell at a discount when compared to units in buildings with this key amenity.

While resort-like pools are to be expected on high-end projects like the Four Seasons Residences, the Austonian, and the W, the pool scene is equally as important at more reasonable projects like 360 and Spring.

Here are the pictures of the new downtown Austin condo pools:

Spring
Spring Austin Condo Pool

See more cool pools!
Read More...

New Profile Posted: 904 West

We've updated the AustinTowers downtown Austin new condo guide to include 904 West, a new $8 million low rise project on 9th and West near Whole Foods and the Nokonah.

The 33 unit project is a green conversion of solidly built commercial structure. The new condo project is being constructed in phases with the first 7 units complete. Prices start at $191,000 and rise to $326,000. We've already added the project to our listings page and a full profile is here.

While the project features an attractive modern design and a quiet location, the most interesting features are the flexible floor plans (some include live/work spaces) and the green features. In general, condo projects utilize significantly less energy than equivalent single family homes. This project should utilize less energy than almost any condo project. Some of the energy efficient features include:

- Dedicated solar panels for each unit
- 100% LED lighting
- Tankless water heaters
- Spray foam insulation
- Rainwater collection
- Double-paned, low-energy glass and windows

Already, the project has been recognized for these attributes with the Austin Business Journal Going Green Award [Winner: Green Building - Residential] and the Envision Central Texas Community Stewardship Awards [2010 2nd Place Finalist].

While the building is only two stories tall it does have an elevator and a swimming pool. So far, one quarter of the available units have been sold.

Here are some additional details from the Statesman:

"The city and Austin Energy are working toward a goal of having 65 percent of new single-family construction be capable of zero net energy consumption by 2015, meaning the homes potentially could generate as much electricity as they consume, with solar panels and advanced energy-efficiency features.

The 904 West project is attracting interest from professionals, empty-nesters and second-home owners who want to live downtown but in a neighborhood setting, Clouse said.

Although zoning rules would have allowed a much taller project, "we didn't want to be a 40-story beacon in the middle of this neighborhood," Clouse said. The surrounding neighborhood mostly has two-story houses used as apartments and offices.

"Instead of being involved with sprawl development, we focused on sustainable development," said Clouse, who also owns Fortis Realty Services, which was involved in designing the first phase of the Bel Air condominium project on South Congress Avenue.

The solar systems cost a total of $515,592, Cordova said. The city returned $365,107, about 71 percent of the cost, to the developers as rebates, he said.

The solar installations will generate an estimated 113,839 kilowatt-hours per year, Cordova said — enough to provide electricity to about 10 average-size Austin homes for a year.

Put another way: the savings are equivalent to planting 2,583 trees in Austin's parks, or the removal of 132,278 vehicle-miles or 17 cars from Austin roadways, Cordova sa
id.

Zilker Park Residences Withdrawn From Market

As developer prepare for a third iteration of Zilker Park Residences, the project has been withdrawn from the market.

In 2007, developers announced plans for 74 units to be developed on the eastern edge of Zilker Park on Barton Springs Road. With units starting at $300K and topping out near $1.3 million, the 3 building project was to sit on the border of the park with direct access to the hike and bike trails. Although the project featured a unique and highly desirable location, it was marketed at the bottom of the downtown condo market.

As a result, the plan was changed substantially in 2008 when the developers reduced the size of the project from 74 to 40 larger units, added a 65 room boutique hotel, and an announced the expansion of the site through the purchase of an adjacent restaurant (formerly Wanfu Tool).

The 2008 Plan for Zilker Park Residences
Zilker PArk Residences

With the revised plan, Zilker Park Residences was supposed to include 40 units ranging in size from a 1,515 square foot one bedroom to the largest 3,241 square foot unit. With the larger units came prices ranging from $659,000, one of the highest starting prices of any project in Austin, to $1.4 million.

Now, developers have begun notifying prospects that the project has been withdrawn from the market. According to the developers, they are redesigning the project to better meet market needs. In particular, they now plan to build a 90 room boutique hotel, spa & fitness center along with 15 large residential condo units.  Currently, they plan to begin construction and marketing for the redesigned project sometime next year.

New Project Listings: 904 West

We've added listings for 904 West, a new low-rise condo project on 9th Street and West Avenue. The new development is close to the Nokonah and Whole Foods in a corner of downtown that has seen very little condo development.

904 West is an interesting "green" condo project. It's the only multi-residential property in downtown Austin offering photovoltaic systems for each unit. The project also features tankless water heaters and LED lighting.

Currently, there are 4 units listed on MLS ranging from $193K for a 577 square foot 1/1 to $327K for an 891 square foot 1/1. We're working on a full profile and will have additional details on AustinTowers soon.


La Vista on Lavaca is Dead. Again.

After a decade of starts and stops, the ill-fated La Vista on Lavaca condo project appears to be fully dead.

Now the planned nine-story residential mixed-use tower consisting of 19 condominiums on the top four floors, a three-floor Executive Business Center, and first floor restaurant, has been abandoned mid-construction by its new owners.



Continue reading here: Read More...

Downtown Austin Condo Sales Soar in May

We've updated the AustinTowers | urbanspace Downtown Austin Condo Market Index through May, 2010 and, for the twelfth month in a row, MLS sales volumes have increased in comparison to previous year numbers. On a per square foot basis, however, year-to-date prices are down about 9% over the comparable 2009 numbers based on a 12-month rolling average.

Month
Sales
Avg. Price
$/SF
Avg SF
Avg Year
% Ask
ADOM
May-09

11

$347,045

$308
1,150
1990
96%
63

May-10

24

$258,967

$285
934
1976
96%
118

Change

118%

-25%

-8%
-19%
-13.91
0%
87%

The big news for May is that condo sales volumes soared, breaking the longstanding Austin Towers |urbanspace record of 22 units in a month (set in April, 2008). View the Full Analysis:

Read More...

With Downtown Marriott Dead, Land Owners Seek New Hotel Developer

Last month, the Austin City Council enacted a zoning change and turned over a public alley in the most effort to lure a major convention hotel to Block 18 --- the Congress Avenue block that used to house Las Manitas and which was at one point going to be taken over by a very large Marriott hotel.

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

Now, the City is trying new tactics to Read More...

Shhhh! New Congress Tower Planned

According to city records, the owners of three vacant historic buildings on Congress Avenue between 9th and 10th street are planning to build a 16-story, 88,000 square foot office tower on the site. If successful, the project would commence construction in 2011 and open by Summer 2012.

According to a statement by Tucker Lynch, a representative of the site owners, in the Austin Business journal, “The owners told us to keep it as quiet as possible,” Lynch said. “We are just doing our feasibility. If it is not feasible, we won’t build.”

According to the Austin Business Journal, "Plans call for eight floors of office space, atop six floors of parking and one basement parking level, plus street retail. According to architecture drawings by Dallas-based HKS, the building will have a glass facade and a terraced set back at the 11th floor. The proposed building bumps right up to the height limit imposed in the Capitol View Corridor. The owner is applying for central urban redevelopment designation, or CURE, which exempts development from some building codes and permits greater heights for the sake of economic benefit. The site is currently zone for “Central Business District,” which allows for 88,000 square feet of development at the site and Lynch said his client is not seeking a density bonus."

The project is one of numerous towers currently in the works. Other projects include:

- A 15-story boutique hotel at 416 Congress Avenue
- Two 40-story Towers by Constructive Ventures on an Austin Energy Site near 2nd and San Antonio
- A 250 unit 28-story condo tower and an adjacent 16-story office tower on the 1.2 acre site bounded by Fifth, Sixth, San Antonio and Nueces streets by Novare, the developer of 360.
- A 15-story office tower with ground floor retail is being proposed for the north east corner of West Cesar Chavez Street and Lamar Boulevard by Capital City Partners

1155 Barton Springs Condo Project Files for Bankruptcy

In April of 2008, 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, our 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.

This week, the project, 1155 Barton Springs, filed for bankruptcy. According to the Austin Business Journal, "PPT Development is seeking Chapter 11 protection, filed at the end of May, claiming its assets and debts each range from $1 million to $10 million, according to records that did not include a complete list of creditors. The company’s largest creditor is San Antonio-based Overland Partners, the lead architect on the project, which is owed about $1 million, according to court records. Despite the setback, PPT Development LP principal Steffen Waltz said the $40 million development called 1155 Barton Springs is merely in hibernation, not dead."

155 Barton Springs South Austin Condo Project

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 any market. While the views are great, top dollar projects need to be perfect, which is not the case with 1155 Barton Springs.

According to the Austin Business Journal, "the 1155 Barton Springs project has been in the works under various names, including The Milan, since at least 2005. In April 2007, developers announced plans to break ground by that year’s end, with tenants moving in by mid-2009. There would be two portions of the project, they said, with one building on the north side of the property on the corner of Barton Springs and Dawson roads and three buildings toward the southern side. The 24 residential units, ranging from 1,600 to 6,200 square feet, would list for $1 million to $6 million each, according to the announcement."

Austonian, Four Seasons Prepare to Open

In downtown Austin, there are two classes of new condo projects. There are upscale projects like 360, Austin City Lofts, Milago, and the Nokonah. About a dozen of these projects have been completed over the decade and almost all are sold out at this point. Only Spring still has new units left to sell. These projects have sold well featuring mostly 1-2 bedroom units priced under $600K.

The second category includes the three super high-end projects now under development: the Austonian, the Four Seasons, and the W Hotel and Residences. These projects typically start around $600K and feature many units priced over $1 million. This is a new market for Austin, and the timing of construction has been difficult for the developers. All three projects are believed to be 40% - 60% sold at this point in time.

This month, two of these projects -- the Austonian and the Four Seasons -- will open and welcome their first residents. The W is scheduled to open in December. Between the three buildings, 501 new high-end units will hit the market this year:

- The Austonian begins welcoming residents next week. The 56-story, $250 million, 188-unit luxury condo tower is the tallest residential building west of the Mississippi.

- The Michael Graves-designed Four Seasons Residences opens later this month. The 32-story project features 148 units and a 32nd floor sundeck, fitness center, party room, catering kitchen, and resident library. The project also includes valet parking, a 24-hour concierge, in-room dining, housekeeping, and daily linen service through the hotel.

- The W will open in December. The $295 million 36-story project will include 252 hotel rooms, 165 condos, 35,000 square feet of office, retail and restaurant space and a new theater to host Austin City Limits on Second Street.

For these projects, the next few months will be essential. With many units yet to sell, developers are hoping that potential-residents will appear now that the projects are ready for occupancy. With the economy and real estate markets improving, sales activity has been picking up at all three projects. While developers have not announced any public discounts, this should be a good time to negotiate, especially for buyers who are willing to consider any of the three projects.

The Future of Downtown Austin: A Visual Tour of the Downtown Austin Plan

This evening, the City of Austin hosted a town hall meeting to review the Downtown Austin Plan -- the draft master plan for downtown Austin.

The purpose of the plan is to create a vision -- and policy framework -- for a vibrant downtown that becomes the region's core for work, play, shopping, and living. The 90-page plan and 93-slide summary presentation (they are fascinating -- get them here) include hundreds of ideas to improve downtown Austin. The ideas range from zoning and historical protections to transit solutions to requirements for store glass transparency.

To provide a quick overview of the very rich content, we have assembled a visual walk through of some of the most interesting content:

(1) The core and waterfront district is red -- this is the area analyzed in the Downtown Austin Plan.


(2) Even without active regulation, emerging land use patterns have effectively segmented downtown activity. In this diagram, pink represents the core employment zone; blue is commercial, entertainment and convention; and orange is residential. The dotted areas are pedestrian priority zones and the diagonal hatches represent sites with development opportunities.


(3) This heat map shows likelihood of redevelopment. Pink means that the site is pending redevelopment, green means near-term development is possible, yellow means long-term redevelopment is possible. Red means that development is unlikely. There are 62 properties > 1/4 block that can be redeveloped. These sites total 48 acres.


The Visual Tour Continues Here: Read More...

New Hotel Planned for Congress Ave!

For those who are counting, this is the fifth new downtown Austin tower announced in the last two weeks. Today's newly announced project is a 15-story boutique hotel with 60-70 rooms. It will be constructed on Congress Avenue between fourth and fifth streets across from the Frost Bank Tower.

The new hotel will be located at 416 Congress and will integrate the existing 1893 Congress Avenue facade
Congress Avenue Austin Boutique Hotel

The boutique hotel will integrate the 1893 Romanesque facade into a new 15-story tower to be designed by prominent Austin architect Dick Clark. The building will be 52,000 square feet and will not require any building variances for construction. The small size results from the small lot -- the average floor plate will be just 3,500 square feet or 50 by 70 feet.

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

The 416 Congress hotel is expected to open in 2012

Two More Austin Condo Skyscrapers Announced!!!

This has been a crazy week. First, the developers of 360 announced plans to develop two new downtown towers. Then, rumors surfaced that the Aquaterra project may be revived as a rental tower. Today, Constructive Ventures announced plans to build 425 new condos in two 400-500 foot towers on an Austin Energy site just West of 360 downtown. Together, these announcements may herald the beginning of a new downtown condo building boom.



The new project by the developers of Spring would include 425 condo units and 15,000 square feet of retail in two point towers on a 1.7 acre site adjacent to 360 and the decommissioned Green Water Treatment Plant downtown. The project would cost $220 million and construction would begin in 2013.

Here is a summary from the Statesman:

The City Council is set to vote today to authorize the city manager to sign a development agreement with a partnership of Constructive Ventures and Trammell Crow Co. to buy the tract for $14.5 million.

The community benefits from the project would include contributions for public art and $2.7 million for the city's affordable housing fund, the largest proposed payment from a developer for a project to date, said Rodney Gonzales, deputy director of the city's Economic Growth and Redevelopment Services Office.

"This is a really good chance for the city to convert an underutilized piece of downtown property into one that generates property and sales taxes for the city and brings forth a substantial contribution for the affordable housing trust fund," Gonzales said.

In 2008, the city chose a partnership of Trammell Crow, Constructive Ventures and USAA Real Estate Co. over four other teams to redevelop the Austin Energy site and the nearby 6-acre water treatment plant at West Cesar Chavez and San Antonio streets with a hotel, apartments, office and retail space.

Those projects are part of the city's grand plan to transform downtown's southwestern edge, including the former Seaholm Power Plant, into a lively, densely developed district. A new central library is also planned along Cesar Chavez.

The city is still negotiating a development agreement and purchase price on the Green site, Gonzales said.

The agreement says the soonest that Constructive Ventures could purchase the Austin Energy property is March 2013. The city must first relocate the control center, from which the entire Austin Energy electric grid is managed year-round.

Larry Warshaw, a principal with Constructive Ventures, said the condominium buildings would be so-called point towers — slender buildings on a wider base like the Spring condominium high-rise, of which he was a co-developer — and would soar between 400 and 500 feet.

"Financing will be the most likely factor dictating a start date," he said

Hilton Condo Owners Sue Over Quality Problems

Seven condo owners in the City-owned Hilton Hotel and 99 unit 5 Fifty Five condo project are suing the city-backed non-profit developer for noise problems and water leakage damage.

The impacted units are located under a catering kitchen that is reportedly loud and susceptible to water leaks into the units below.

According to the Statesman:

The condo owners are suing Austin Convention Enterprises. Tony Ciccone, the lawyer representing three of them, said the problems caught his clients by surprise because they were not allowed to tour sections of the building before their purchases and did not know that hotel plans included putting a banquet kitchen above residences.

Five of the condo owners suing the city say that chronic leaks from the kitchen, plus the noise from a service elevator and heavy carts thunking across the kitchen's tile floors at night, have made their units uninhabitable.

According to court filings, Linda Cartwright bought a unit in August 2006 and soon discovered water leaking in through her smoke alarm. A year later, Cartwright "returned from vacation to find her ceiling open and water openly running onto the floor of her unit," causing severe damage, the lawsuit says.

Gary and Rhonda Golden allege in their lawsuit that leaks and noise have ruined their two units, on the eighth and ninth floors.

The city has acknowledged some of the problems.

"Based on prior investigations ... it is obvious that the kitchen is causing the leaks" into condo units, according to a Jan. 8 letter from Assistant City Manager Rudy Garza to the condominium owners association.

The Hilton was developed by the City through a $110 million1998 bond issue. The convention center hotel was a key part of the City's strategy to strengthen the convention and tourism industries with a large anchor hotel. Such a hotel is required to lure larger events to the city. According to the City, the hotel has been a financial success, paying off its debt obligations at an accelerated rate.

The city owns 74.41 percent of the space inside the building while Condo owners collectively own 22.68 percent of the space. The remaining 2.91 percent is commercial space owned by Neches Street Partners. So far, the majority of complaints are related to the small number of units directly under the kitchen. It is not clear whether the units on upper floors suffer from similar construction issues. The complex ownership structure has made it difficult to address the issues by moving the kitchen.

The Hilton is not the first project to be sued by its condo owners. Last year, Sabine owners sued the developer for a variety of problems including noise and safety issues. The litigation was resolved when the developer agreed to make significant repairs and enhancements to resolve the issues.

360 Developer Planning Two New Austin Buildings!

Novare, the developer of 360, has announced preliminary plans for two new towers to rise one block west of the downtown post office. The new plans call for construction of a 250 unit 28-story condo tower and an adjacent 16-story office tower on the 1.2 acre site bounded by Fifth, Sixth, San Antonio and Nueces streets.

The new project, to be called Ovation, replaces earlier plans for a larger 400-unit condo development on the same site. Novare's 360 was one of the largest and most successful downtown projects, selling out 430 units with strong pre-sales and minimal discounting.

One of the things that made 360 so successful was its combination of competitive pricing -- most units were $200K to $500K -- and design: it was desirable tall glass building on a great downtown site. In previous statements, Novare has implied that it plans to follow a similar mode for future downtown condo developments such as Ovation -- aiming to build desirable projects with entry-level pricing.

Since the completion of 360, Novare has flirted with development plans for the site as well as for an adjacent site that currently houses the downtown post office. Novare is currently working on plans to redevelop the post office in another location, allowing the company to purchase the prime and underutilized land and to develop that site as well.

According to the Statesman, the new "residential tower, called Ovation, is for 250 units with ground-level commercial space" and "the office tower would include a restaurant, bank and a parking garage with 567 spaces." In addition to the condo building, the plans call for "a 153,634-square-foot office building, a 5,000-square-foot "high-turnover" restaurant, 14,000 square feet of specialty retail and a 4,000-square-foot drive-through bank."

Novare has been clear that development plans were revised to better adjust to a changing local market and a changing financing market. It is the latter that has delayed the project and which continues to be an obstacle for its completion. However, as markets return to normal, the company is increasingly confident that it will be able to line up the support required to proceed.

Seaholm Development Update

More than 2 years ago, 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, is supposed to result in a 22-story hotel, 60 condo units, and 180,000 square feet of retail and commercial space.

More than a decade in the works, the original plan was for the new project to begin construction in 2009 and to open in 2011 with the 150,000-square-foot decommissioned power plant as the centerpiece of the 7.8-acre property. Needless to say, the project is delayed.

While the project remains active, a variety of obstacles have prevented development from moving forward. In particular, the City is in prolonged negotiations with Union Pacific over development of portions of the lot which the railroad controls. Apparently, the company is concerned about dense development in the area immediately surrounding active railway lines. With a dramatic increase in pedestrian and bicycle traffic across the tracks, the company is appropriately concerned about safety.

The second issue hindering construction is the slow development of a city-funded 315-space parking garage on an awkward corner of the site. The City, which already allocated $3.8 million for the project, must find a way to fit a large number of spaces into a small irregular site without building high. Since the site is within the Capital View Corridor, the height of the garage is limited to 40 feet.

Once these obstacles are overcome, the lot can be split and the private development of the site may proceed. For the private developers, however, there is another major obstacle: they have not raised the necessary funding to begin the project. In this tough environment -- and with two major proposed office buildings sucking up potential tenants -- financing will be no easy task.

Despite the obstacles, Seaholm remains one of the most desirable and important downtown development projects. While the economy and the difficult commercial financing environment pose serious challenges for any project, Seaholm has a high probability of completion once the obstacles have been resolved and the financing environment improves.

With offices, extensive retail, and more than 3 acres of open space, Seaholm will further shift the heart of downtown to the west once it is completed. 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 dramatic part of the project is the redevelopment of the Seaholm facility itself. When complete, the historic art deco structure will include nearly 100,000 square feet of retail and restaurants.

Austonian, W, Four Seasons, & Spring Sales Estimates

Harold Hunt, a research economist with the Real Estate Center at Texas A&M University, published an interesting profile of the downtown Austin condo market in Tierra Grande.

First, the report calculated that "about 1,500 condominiums have been delivered to the downtown market since 2001 . . .To date, nearly 98 percent of those units are sold and closed" Of the 18 projects completed over the last seven years, all but 18 of 1,544 units have been sold.

Interestingly enough, the report included sales estimates by project for four unfinished projects: The Austonian, the Four Seasons, the W Hotel & Residences, and Spring. These estimates, credited to Capital Market Research and dated March 10, 2010, show the challenges in selling hundreds of million dollar units in the current environment. While anecdotal research shows that sales have increased in recent weeks, many additional units remain unsold.

Sales Estimates for Projects Under Construction

Project
Year
Units
Contracts
Avail.
% Sold
Absorption / month
Avg Price
Avg Size
$ / SF
Austonian

2010

178
55
123
31%
1.89
$1,516,000
2203
$688

Four Seasons Residences

2010

148
74
74
50%
2.64
$1,269,447
1969
$645

W Hotel & Residences

2011

159
82
77
52%
2.49
$1,067,352
1716
$622

Spring

2009

248
120
128
48%
3.87
$521,063
969
$538

In summary, the article concluded that "More than 400 of the most expensive luxury condos in Texas are coming online in downtown Austin. Some say the timing is disastrous; others believe economic recovery may work in favor of these developments. Upscale buyers hold the key to success for this small niche market."

The Four Seasons Residences to Focus on Service

Lorley Musiol, the new Director of Residences at the Four Seasons in Austin, captures an important intangible about downtown condo life when she states that "this is only a building. It's going to take personality and a staff I'm hand-picking to make that building come to life."

One of the things that is hardest to quantify about a new building is the quality of the service. Training staff to connect with residents, to be personable yet professional, and to meet every residents' random and unpredictable needs and desires without disappointing is hard. This is what the Four Seasons is good at -- and something that other projects will have a tough time duplicating.

For example, the Four Seasons Residences will keep a photo database of frequent visitors so they can greet them by name. That is impressive. And of course they will also keep a database on residents to track their preferences.

Lorley Musiol and the Austin Four Seasons were featured in an interesting article in Austin360 which details at length the project's focus on service:

The word "no" does not exist in Lorley Musiol's vocabulary.

As a hotel concierge for 23 years, 16 of them at Four Seasons hotels including Austin's, she has dealt with the most persnickety of guests. Never, she says, has a request gone unfulfilled. She has thrown a birthday party for an 18-year-old Saudi prince at 2 a.m. at the Los Angeles' Beverly Wilshire Hotel on short notice. She has spelled "Marry me" in rocks outside Las Vegas so a skydiving couple could see it. She has enrolled as a student at the University of Las Vegas in order to check out architecture books that Michael Jackson wanted.

"I always find a way," she says over coffee on the terrace outside the hotel's Trio restaurant. "There is no intimidation."

If Musiol, 56, sounds like she has a Superwoman complex, it's because her job has required it. And she'll soon need to ramp up the can-do attitude, if that's possible, because sometime around Memorial Day weekend, Four Seasons Residences will open and she will be its Director of Residences. She'll manage the building and staff and make sure that every resident's wish is granted.
Read More...

15-Story Downtown Office Tower Proposed

A 15-story office tower with ground floor retail is being proposed for the north east corner of West Cesar Chavez Street and Lamar Boulevard.

The new project, to be located between the Gables apartment and Seaholm, would be the first new office project constructed in the downtown core since the Frost Bank tower was completed in 2001. The developer behind the new project, Capital City Partners LLC, recently completed Capstar Plaza, a 115,000-square-foot, eight-story, office building at the southeast corner of MoPac Expressway and Fifth Street.



The new building, currently named Park Plaza, will only be built if the developer can line-up enough tenants to justify development. If completed, the project would include 189,000 square feet of Class A office space and 10,000 square feet of ground floor retail. The project would be located just West of Seaholm and across the street from Ladybird lake. The 1.8 acre plot is owned by Gables residential which recently completed a large low-rise rental project on an adjacent site.

Condo Liquidity Analysis: Will You Be Able to Sell?

If you are thinking of buying a downtown condo unit that you will eventually sell, you need to think about liquidity. Unfortunately, rapid growth in the number of downtown units has also meant fierce competition among sellers in some projects. With so many sellers and ongoing competition from new units in projects like Spring, it can be difficult to sell.

When thinking about liquidity, you need to start with the building. Since most buyers pick a building and then a unit, being in the wrong building can make it very difficult to sell. Since most units are similar, the market is extremely efficient and the only way to sell in an unpopular building is to drop your price -- often significantly.

Last year, buyers purchased units in 22 different downtown buildings through transactions listed on the MLS. Of the 112 2009 downtown sales, there were only eight projects that sold 5 or more units. While we have pointed out many times that MLS statistics ignore developer sales and thus provide and incomplete market picture, they are in fact very accurate for sales by owner as very few units are sold without agents.

To analyze liquidity, we compared the number of units currently on the market in each building with the number of units sold in each building during 2009. We looked for buildings where the total inventory would sell within 9 months. Of the 8 projects profiled, only two buildings met this criteria, The Nokonah with an amazing average of 6 months and Milago with an average of 8. Not far behind, with an average of a year, were Austin City Lofts and the Penthouse condos.

The Nokonah, which leads the list, was the first high-end downtown project. It has an older and less likely to move owner population than projects like 360. While Milago is newer and more affordable, it is notable in the volume of units that sell. In 2009 alone, 24 of it's 240 units -- 10% -- changes hands over the MLS. Austin City Lofts has always been a popular and well-respected building with relatively brisk sales.

On the other end of the liquidity spectrum are three slow-moving projects: Five Fifty Five with an expected time to sell of 45.6 months, Cambridge Condos with a 28 month average, and 360 with an average of 27.8 months. It's hard to understand why 360 -- one of the most desirable and successful projects -- fares so poorly on the liquidity front. Likely, the issue has to do with the projects success as buyers who successfully purchased units on a well-subscribed wait list are now ready to sell. Many buyers may be holding out for more money than buyers are willing to pay. In addition, year 2 of the project may be a peak time for turn-over.

Equally concerning is the number of projects that did not make the list because sales volumes were too low to evaluate. The Brown Building and Plaza Lofts each had 3 sales during the year. Brazos Lofts, the Shore, and Brazos Place each had just one sale during the year. The Sabine did not have any successful unit resales.

Here are the full statistics on downtown Austin Condo liquidity for the eight projects with enough transaction volume to evaluate:


2009 Sold

2010 On Market
Months to Sell
Nokonah

10

5
6.0

Milago

24

16
8.0

Penthouse Condo

7

7
12.0

Austin City Lofts

6

6
12.0

Greenwood Towers

7

9
15.4

360 Condos

19

44
27.8

Cambridge Condo

6

14
28.0

Five Fifty Five

5

19
45.6

Exclusive: January & February Downtown Condo Sales

We've updated the AustinTowers | urbanspace Downtown Austin Condo Market Index for January and February, 2010. With the new results loaded, we are pleased to announce that year-over-year sales volumes have increased for the eighth month in a row. That, however, is where the good news ends.

Month
Sales
Avg. Price
$/SF
Avg SF
Avg Year
% Ask
ADOM
Jan-09

4

$358,225

$321
1,129
1996
93%
85

Jan-10

6

$274,547

$291
953
2005
96%
127

Change

50%

-23%

-9%
-16%
9.00
3%
49%


Month
Sales
Avg. Price
$/SF
Avg SF
Avg Year
% Ask
ADOM
Feb-09

6

$400,833

$322
1,258
1998
90%
116

Feb-10

8

$291,938

$292
1,002
1979
94%
50

Change

33%

-27%

-10%
-20%
-19.00
5%
-57%

During January and February, 14 downtown Austin condo units were transacted on the MLS: 4 more than during the same period in 2009 with the gain spread across both of the months. While volumes are up, prices are headed downward as buyers gravitate towards smaller, older, and cheaper units than they did in the past.

Read the full analysis:

Read More...

Coming up: Urbanspace Downtown Q&A

As we first announced last month, urbanspace has announced a monthly downtown Q & A that will be held at the urbanspace office the first Saturday of every month.  It is free to anyone interested in learning a little bit about downtown Austin and the development taking place.  

The Downtown Q&A was founded by Emily Crawford and developed in conjunction with Bryan Cady. As former first-time buyers and former Downtown Austin newbies themselves, they wanted to provide an interactive forum to help new buyers understand the options in the current Downtown Austin marketplace. Likely questions: Should I lease or buy downtown? What is the Downtown Austin lifestyle all about? What are the best deals out there? Why live downtown?

You can join them this month on April 3rd from 11-noon.

Top Art Galleries: New York, San Francisco, 360 Tower

This week, Details magazine published its list of the ten coolest art galleries in America. As would be expected, the list was dominated by galleries in New York (4) and California (3). Less expected was the inclusion of Austin's own Lora Reynolds Gallery which is located in the base of the 360 tower. The remaining two galleries were located in Chicago and Minneapolis.

Details claims that the 10 galleries on the list represent "the top places in the country to see contemporary art." In their profile of the Lora Reynolds' Gallery, the author writes that "after seven years toiling in the London and New York art worlds, Reynolds forged a niche in the competitive Austin scene by luring a roster of international talents like British artist Ewan Gibbs to Texas. As she told the Austin American Statesman when the gallery opened in 2005: "Why not bring art here that otherwise wouldn't be shown?" And what she shows doesn't just make you look—it makes you look twice."

Lora Reynolds established the gallery in March 2005 after working with galleries in London and New York. The gallery's mission is to bring national and international contemporary artists in all media to Austin. The gallery organizes 6 – 8 shows annually of emerging, mid-career, and established artists.

While Austin has a strong cultural scene for a mid-size city, it is not known for contemporary art. In addition to the well-respected Arthouse, it is great to see national recognition for Lora Reynolds Gallery. See the full article here.

Lora Reynolds Gallery
Lora Reynolds gallery Austin Texas

Forbes: Austin Economy Good

According to Forbes.com, the Austin-Round Rock area tied for first on a list of large metropolitan areas where the recession is easing.

The report listed Austin and Washington D.C. as the two top cities in terms of economic recovery. The report considered a number of factors including local economic output, job growth and real estate industry trends. While the national unemployment rate hovers at 9.7%, the comparable rate in Austin is 7.6% (up from 7% a month ago). Washington D.C. has a 6.2% unemployment rate.

According to Forbes, one thing that Austin and Washington D.C. have in common is a high rate of government job generation. The number of Central Texas jobs increased just shy of 1 percent between 2007 and 2009, more than any other city included in the research. Dallas came in second on the ranking behind Austin. The number of jobs there are expected to increase more than 7 percent in the next three years. San Antonio and Houston also made the top 10 list.

For anyone with a stake in downtown Austin real estate, future downtown home values will be driven by supply, access to lending, migration, and economic growth with job growth being a key factor. Supply for the next few years is highly predictable --- it's growing on the high end and flat in the low and middle price brackets. Access to mortgages remains constrained for conforming loans and highly constrained for jumbo loans. Migration is expected to remain strong. That leaves economic growth remains the biggest unknown.

While the economy is improving, cuts at large local employers or a dip in technology spending could dramatically change the local housing outlook. But so far, as Forbes notes, Austin is doing better than just about every other city in the country.

Exclusive: 2009 Condo MLS Sales Review

With the help of urbanspace Realtors, we have put together a comprehensive analysis of recorded downtown Austin condo transactions in 2009. The analysis looks at MLS data capturing 2009 condo sales in area DT during the year 2009. Like all listing data, it excludes private transactions that were not listed on the MLS. This is a big exception considering that hundreds of units have been sold through non-mls sales.

The data does, however, provide a very clear view of the downtown resale market. It shows the price per square foot that buyers are willing to pay for real units, provides information on building-by-building sales prices, and shows how long it takes for units to actually sell. Here is the annual summary of 2009:

Market Summary - MLS recorded 112 downtown Austin condo transactions during 2009 (down 14% over 2008) with an average sales price of $329,374 (down 5%) which represents an average price per square foot of $298 (down 3%). Units sold for 95% of listing price in an average of 88 (3 days faster than 2008). For the second year in a row, the project with the most sales on MLS was Milago with 24 transactions (v 25 last year). Here are the details for 2009 with the comparison to 2008 in parenthesis:
- DT Condo Transactions: 112 (130 in 2008)
- Avg. Sales Price: $329,374 ($345,856)
- Avg. Listing Price: $353,311 ($362,750)
- Sold Price as % of Listing Price: 93% (95%)
- Avg. Sold $/SF: $298 ($308)
- Avg. Listing $/SF: $319 ($322)
- Avg. Days on Market: 88 (91)
- Avg. Unit Size: 1,126 (1,106) Square Feet

Old v New
- The MLS data clearly shows that the downtown Austin condo market is really 3 separate markets. The first market contains older units constructed prior to 1986 with an average age of 41 years. The second market is buildings constructed after 1998 when the current downtown boom started. The third market, which we have the least data on, is buildings currently under construction or recently completed. In particular, the high-end Austonian, W, and Four Seasons serve a much higher-end market than any of the current projects. Over the last year, sales of older units has plummeted as new buildings have entered the market. Sales of newer units are up dramatically. Prices for all units are down. Here are the details:
- Average Year Built, All Condo Sales: 1991 (1983 was the average in 2008)
- Units Built Before 1986: 40 (73)
- Units Built 1987 - 1998: 0 (0)
- Units Built After 1998: 82 (57)
- Pre 1986 Avg Sales Price & $/SF: $219,083 ($277,737) & $237 ($278)
- After 1998 Avg Sales Price & $/SF: $390,646 ($430,416) & $324 ($363)

High & Low: In a market and year where affordability is an important issue, it is amazing to see that there were 24 transactions under $200K which is a large increase from 18 units in 2008. It shows that it is possible to find affordable units downtown.
- Least Expensive Sale: $110,000 in Greenwood Towers ($107,000 in Greenwood Towers in 2008)
- Most Expensive Sale: $1,368,000 in the Nokonah ($1,100,100 in the Nokonah)
- Lowest $/SF: $162 for a unit in Greenwood Towers ($168 for a unit in Towers on Town Lake)
- Highest $/SF: $452 for a unit in the Nokonah ($571 for a unit in Five Fifty Five Condos)
- # Units Under $200K: 24 (18)
- # Units Over $750K: 5 (6)

Transactions by Month: Sales results were less cyclical than usual with strength in the second half of the year. Compared with 2008, the beginning of 2009 saw a dramatic reduction in the number of units and the back half of the year saw a strong increase over 2008. While there was strength in the back half of the year, it doesn't seem to have translated into higher prices. At Milago for example, prices were 3% lower on average in the second half than the first half.
Month - # Units
January - 4 (5)
February - 6 (6)
March - 4 (14)
April - 4 (22)
May - 11 (13)
June - 8 (13)
July - 12 (10)
August - 14 (13)
September - 15 (13)
October - 13 (9)
November - 13 (8)
December - 8 (4)

Over the next year or two, as a significant quantity of transactions continue to be conducted outside of the MLS, it will be difficult to gauge exactly what is happening with downtown Austin condo sales, especially on the high end. With a greater proportion of transactions shifting from private developer sales and auctions to resale and the MLS, we need to see increased MLS activity over the next year just for the market to remain stable. While lending remains constrained and the stresses of the economy remain strong, a dramatic near-term downtown condo upswing is unlikely. For sellers in particular, the next few months will continue to be very difficult.

With the addition of December data (it was a strong month), we've updated the AustinTowers | urbanspace Downtown Austin Condo Market Index through the end of 2009.

Another Downtown Building Boom?

There should be no doubt: It's a tough time to be a downtown condo developer in Austin, Texas. While building costs have slipped from their peak, demand is soft and it remains a buyer's market. For high-end projects in particular, supply remains plentiful and competition among sellers is fierce.

Yet, developers are once again thinking about the next wave of projects. Over the next year, the current non-luxury condo inventory is almost certain to be depleted. With a 2-4 year construction timeline, developers are thinking now about the next wave of demand.

Here is a summary of some of the projects currently on the drawing board:

- Aquaterra (condo): Originally envisioned as a 163 unit 20-floor condo tower at 210 Barton Springs Rd., this was one of the first projects cancelled. Now, the architects have been asked to update the project to be more competitive in the current environment as the developers look for a path to proceed. No funding has been lined up.

- 7Rio (Condo): Originally envisioned as a $50M 34-floor 160 unit condo project, 7Rio is also back on the drawing board and being actively rethought for development. Originally planned for completion in 2009, the building would be on the site of Ranch 616 which will be incorporated into the building. The project has been supported by the neighborhood Association and the developer has already successfully completed two other projects in Austin.

- 800 W 6th St (Office): Austin-based Cypress Real Estate Advisors plans a 120,000-square-foot, six-story, Class A office building on the site.

- Block 51 (Office + Condo): According to the Austin Business Journal, the stalled Ovation development, originally reported to be a 37-story condo tower on Block 51 by Atlanta-based Novare Group Inc. and Austin-based Andrews Urban LLC, is being revamped. It now involves a partnership with International Bank of Commerce and more office space than originally planned. The plan revisions are in the beginning stages, and specifics will be available in mid-2010, he said.

- Schlosser Tower (Office & Condo): Schlosser development plans to construct a new 27-story downtown condo and office tower. The developer is proposing to build a tower of up to 350 feet on the vacant lot between Whole Foods and Austin City Lofts. As proposed, the new building would include street level retail and parking on the lower floors, 16 stories of office space, and 90 condo units on the top seven floors. In addition, a companion building on the 2.7 acre site would include three levels of commercial office space with parking and street-level retail.

- 21c (Apartments): The developers are proposing -- but have not found funding for -- a 31-story 350 unit apartment tower near the corner of Red River and Cesar Chavez. Rents would start at $1.50 per square foot which would mean $1,000 / month for a 700 square foot unit or $1,500 for a 1,000 square foot unit. The goal would be to make the building 70% 1 bedroom / 1 bath units. As many as 10% of the units for be designated as affordable units with controlled rents. A second tower -- which is more precarious in the current environment -- would be a 12-story 200 room hotel, spa, and restaurant. The developers are hoping to put parking underground and include ground retail in the project. Although no specifics have been announced, the third tower could include condos if at some point it does get built.

While almost none of these projects have funding, the investment in new development is a strong sign that when the market stabilizes and commercial financing becomes more common, another building boom is likely. With projected population growth and one of the strongest economies in the country, Austin will likely be an attractive target for development as the markets improve.

7RIo Tower as originally Proposed
7Rio Tower CLB Austin Condo

Sabine Auction Results!

Today, more than 200 registered bidders showed up to compete for 31 units in the much anticipated Sabine auction. In the end, 29 of 31 units sold for an average 30.5% discount with a final price per square foot of $228. With strong demand, the developer added four units into the auction: three just days before the sale and the fourth unit during the auction.

Prices were about 19% lower on a price per square foot basis than the recent Brazos Place auction -- the Sabine's closest comparable. The additional discount is appropriate given the problems that have plagued the project. In a recent valuation analysis, Austin Towers estimated that a fair sales price would be a 30% discount and units traded hands for slightly less than that.

Here are the key metrics on the sale:

Sale Prices by Unit Type
Unit Type
Original Price
Sale Price*
$/SF
Discount
1/1

$252,631

$189,120
$264
25.1%

1/1 + Study

$289,900

$196,733
$210
32.1%

2/2

$464,083

$310,007
$214
33.2%

All Units

$341,697

$237,388
$228
30.5%
* Includes 4% Buyer Premium

Sale Prices by Unit

Unit #

SF
Bed/Bath
Original Price
Starting Bid
Sale Price*
$/SF

303

693

1/1

$234,900

$85,000
$172,640
$249
305
1462

2/2

$409,900

$145,000
$276,640
$189
308
925

1/1 + Study

$267,900

$95,000
$193,440
$209
401
1461

2/2

$485,900

$165,000
$319,280
$219
404
728

1/1

$249,900

n/a
$194,480
$267
409
918

1/1 + Study

$259,900

$95,000
$193,440
$211
501
1461

2/2

$485,900

$175,000
$327,600
$224
502
755

1/1

$239,900

$95,000
$193,440
$256
504
728

1/1

$249,900

$85,000
$192,400
$264
508
951

1/1 + Study

$279,900

$95,000
$188,240
$198
510
682

1/1

$204,900

$85,000
$166,400
$244
605
1467

2/2

$434,900

$155,000
$287,040
$196
610
682

1/1

$229,900

$85,000
$167,440
$246
701
1461

2/2

$469,900

n/a
$350,480
$240
703
695

1/1

$240,900

$95,000
$197,600
$284
704
728

1/1

$259,900

$85,000
$195,520
$269
705
1467

2/2

$449,900

n/a
$315,120
$215
707
1426

2/2

$409,900

$135,000
$279,760
$196
801
1461

2/2

$530,000

$185,000
$357,760
$245
802
755

1/1

$273,400

$105,000
$205,920
$273
804
728

1/1

$311,900

n/a
$196,560
$270
805
1460

2/2

$469,900

$165,000
$309,920
$212
808
951

1/1 + Study

$311,900

$95,000
$198,640
$209
904
728

1/1

$263,900

$85,000
$197,600
$271
907
1426

2/2

$434,900

$135,000
$263,120
$185
909
918

1/1 + Study

$294,900

$95,000
$195,520
$213
910
682

1/1

$244,900

$85,000
$180,960
$265
1001
1419

2/2

$550,000

$195,000
$365,040
$257
1004
728

1/1

$279,900

$95,000
$197,600
$271
1007
1426

2/2

$437,900

$145,000
$268,320
$188
1008
951

1/1 + Study

$324,900

$105,000
$211,120
$222

AVG

1,043


$341,697
$117,222
$237,388
$228
* Includes 4% Buyer Premium

Interestingly enough, the developers still own about a dozen units which they plan to sell directly to buyers and through MLS listings. In can be assumed that these units will sell for approximately the same price as the auctioned units which raises the obvious question: why didn't they sell the remaining units in the auction? While it's hard to know what they are waiting for, the developers likely wanted to avoid flooding the auction with too many units and driving prices even further down.

For the developers, the auction is likely a relief. It does go to show that these sorts of auctions do work and that there are many potential downtown Austin condo buyers on the side lines looking for a good deal. The prices of the remaining units -- and the speed with which these units sell -- wlll determine whether the auction prices were in fact a good deal.

UrbanSpace to Hold Monthly Q&A for Downtown Buyers


In an effort to reach out to new downtown Austin condo buyers, urbanspace has announced a monthly downtown Q & A that will be held at the urbanspace office the first Saturday of every month.  It is free to anyone interested in learning a little bit about downtown Austin and the development taking place.  

The Downtown Q&A was founded by Emily Crawford and developed in conjunction with Bryan Cady. As former first-time buyers and former Downtown Austin newbies themselves, they wanted to provide an interactive forum to help new buyers understand the options in the current Downtown Austin marketplace. Likely questions: Should I lease or buy downtown? What is the Downtown Austin lifestyle all about? What are the best deals out there? Why live downtown?

You can join them March 6th from 11-noon.



Sabine Auction Pricing Analysis: Looking at MLS Sales

With one week until the Sabine auction, it is clear that many potential buyers are considering participating in the sale. With starting bids as low as $85,000, bargain hunters will inevitably emerge looking for a great deal. The big question, however, is what is the right price for a Sabine unit.

For a few reasons, valuation of the Sabine units is particularly difficult. First, the building has had real problems with noise complaints, elevator issues, and a tenant lawsuit. The developers claim that the issues have been fixed but the history will still impact the value. A building is a brand, it is part of your identity, and the Sabine brand is damaged.

Second, not a single Sabine unit was transacted on the MLS in 2009. Not one. The most recent comparables are 5 transactions from mid-2008. These show an average price per square foot of $256 for one bedroom units (2 sales) and $352 for two bedroom units (3 sales) -- an unusually large difference between unit types. Since these prices were during the market peak and since they predate the buildings problems, they are just about useless.

Third, the Sabine is a condo conversion project and not a new development. This greatly restricts the comparable units that can be considered in a real analysis. Essentially, it leaves Brazos Place as the primary point of comparison. Since Brazos place also went to auction, it may be a good indicator of where the auction prices will land. But the Brazos Place auction was held during tougher times and the building did not have the problems that have plagued the Sabine. One other possible comparable is the Brown building, but we have seen very few recent MLS transactions.

So, while those are the problems, we had to start somewhere and here is the analysis: we used three valuation methods:

(1) We looked at condo conversion sales on MLS in Brazos Place and the Brown Building over the last 4 months. During this period, the average price was $271 / square feet for transacted units.

(2) We looked at the Brazos Place auction which resulted in an average price of $281 / SF (although not really relevant, the average discount was 29%).

(3) Peak MLS sale price by floor plan from early 2008. Useful information but in no way indicative of the value today.

See the full analysis: Read More...

Austin is Very Very Very Lucky

2009 was a tough year for job creation in the United States. Since job creation drives home prices, the 2009 job losses are likely to leave a lasting impact.

How lasting? Economists estimate that it may take the United Stated 125 months (10+ years) to fully recover the jobs lost during the great recession of 2009. In Texas, which had the strongest job growth of any state over the last decade, it is predicted to take 37 months or just over 3 years for the job losses to be recovered.

So, what about Austin? In 2009, Austin lost 2,600 jobs. In a normal recovery, the city would be expected to make up these losses in about two months -- that's 10 years and 3 months faster than the rest of the country. Local economist Angelos Angelou is predicting 26,300 new jobs and a healthy real estate environment through 2011 while warning that Austin’s economic development performance, especially around clean technology, is lagging.

While the future looks bright, we are not out of the woods yet. Technology does not perfectly follow the normal business cycle and Austin remains disproportionately dependent on the technology industry. In new areas like clean technology and biotech, the City is losing ground. Until we see job losses in the tech industry end, we're unlikely to see strong local job growth.

That said, the economic mood in town is definitely improving. One example of this is the local single family home market. In December, Austin home buyers returned in force, increasing sales 5 percent from the same time in 2008. The median price of the 1,373 homes sold in December rose to about $194,000, an increase of 6 percent year over year.

The bottom line is that we are very very very lucky. There is almost no other place in the U.S. that has emerged from 2009 as unscathed as Austin, Texas.

Sabine Auction Update

As we reported last month, 27 of the 44 long-vacant units remaining in the Sabine are finally headed to auction on February 28th. The auction is a last hope for the project which is currently facing foreclosure.

According to the Austin Business Journal, "Beverly Hills-based auctioneer Kennedy Wilson will sell-off 27 of the available 44 units Feb. 28, taking bids as low as $85,000 and $195,000. The apartments were previously listed near $204,900 and $550,000. Condo buyers would receive a one-year Tower Health Club and Spa membership and up to $1,500 in closing costs paid by the seller."

Kennedy Wilson has handled many condo auctions in the last year, including the successful Brazos Place auction in Austin. The auction will be held in February 28th at 1 p.m. at the downtown Hilton. According to the auction firm, potential buyers must register by Feb. 25. The company has set up a Web site specifically for auction information here.

It's always hard to predict what will happen in an Auction like this. In the Brazos Place auction, held during tougher times, all 19 remaining units were sold in less than 90 minutes to a packed room of bidders. In that case, the units sold at a 29% discount to the original listing price. This is, however, is 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 the original 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. We'll see what will happen with the Sabine, but discounts of 20 - 35% off original prices are likely.

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 in 2007 and the majority of units still remain vacant although they have been removed from the market due to pending litigation. Unit plans range from one-bedroom, 682-square-foot units to two-bedrooms with as large as 1,419 square feet.


Get the full details on the auction here.

Waller Creek Tunnel Project Advances

On Thursday, City of Austin officials approved eminent domain proceedings to reclaim a parking lot between 4th and 5th street that is required to begin the Waller Creek tunnel project.

The half-block property is essential to development of the mammoth downtown tunnel project. According to officials, it is needed for two tunnel easements, one temporary and one permanent. The approval does not initiate proceedings to claim the property, but allows city officials to do so if they can not reach agreement with property owners.

The Waller Creek Tunnel Project is a storm water bypass tunnel beginning with an inlet structure in Waterloo Park and an outlet structure at Lady Bird Lake near Waller Beach and the Four Seasons Hotel. Nearly, a mile long, the tunnel will vary between 22 and 26 feet in diameter. The project is expected to reduce the size of the 100-year floodplain of the lower Waller Creek watershed by an estimated 28 acres and allow denser development and redevelopment in a very desirable area of downtown Austin. A pump station at Waterloo Park will maintain constant water flow in the creek during the dry season, thus improving water quality and fostering a creek side atmosphere suitable for public venues or natural settings. Creek side inlets located between 4th and 5th streets and 8th and 9th streets will capture and divert additional flood waters south of 12th street.

The tunnel project is comprised of several construction projects, including utility relocation, the tunnel, the inlet, outlet, creek side inlets, and site restoration. The Tunnel project will cost approximately $127 million—an initial estimate based on 2006 dollars. Construction will take place from January 2010 until July 2014.

Waller Creek
Waller Creek Tunnel Austin

According to the Austin Business Journal, "the lot discussed this week is owned by the Strenger Real Estate Holdings Ltd. and is used for paid parking. City technical resource and professional engineer Stan Evans said the temporary easement is needed for staging construction and the permanent section is needed to restore the creek and install draining infrastructure. He said the city and the property owners are currently in negotiations, but if the two do not reach an agreement by an undisclosed deadline, eminent domain will proceed."

Downtown Rail Service to Start in March

After what seems like endless series of problems and delays, Cap Metro has announced that light rail service will begin in March. Service was originally scheduled to commence on March 30, 2009.

MetroRail will run from downtown to Leaner with stops for Lakeline, Howard, Kramer, Crestview, Highland, MLK, Jr., and Plaza Saltillo. The full 32 mile trip is estimated to take 57 minutes with a maximum speed projected to be as fast as 60 mph. Capital MetroRail will offer service every 35 minutes during morning and afternoon rush hours with fares ranging from $2 to $3 depending on distance. There will also be discounts for monthly passes and certain categories of riders. Senior citizens and children under 6 ride for free.

The trains (shown below) are very attractive. The city's six trains will each have a capacity of 200 passengers with 108 seated and 92 standing. Believe it or not, the train will actually have wifi service on board as well as bicycle racks and work tables. For safety, the vehicles have ten cameras outside and six inside, as well as a sophisticated communications system.

MetroRail was originally approved in 2004 when voters within Capital Metro's territory endorsed MetroRail as part of a long-range mass transit plan, which also includes expanded local and express bus service, as well as a possible streetcar system (modeled after the Portland Streetcar), which would connect downtown Austin, the Texas State Capitol complex and the University of Texas-Austin with the master-planned Mueller Community redevelopment project. Technically, the system is not considered light rail, because it shares the main-line tracks used by freight trains, and because of its infrequent rush hour-focused service.

With a downtown stop in front of the convention center, the train will allow some downtown workers to commute to a limited number of transit friendly city locations. For Austin residents who don't live downtown, the new train will provide a way to bypass rush hour traffic.

With one route, 9 stops, and infrequent service, the train is unlikely to have a dramatic effect on the city when it begins service. In fact, the City is estimating ridership at 2,000 people a day. While a small portion of the population, removing 2,000 cars from downtown and the other destinations on a daily basis would be significant. The important thing to note is that this is the beginning: if it is successful, more trains, routes, and increasingly frequent service may be added in the future.

Austin Cap Metro Metrorail light rail train car

Austin Cap Metro Metrorail interior

Austonian Dismantles Crane, Throws Party

Over the last few weeks, the Austonian has been slowly dismantling its crane, signaling the beginning of the final phase of construction. With the exterior shell complete and the elevators now fully functional, the Austonian invited hundreds of guests to a private party on the the top three floors of the tower last Friday night.

From floors 54, 55, an 56, I was able to see downtown from a new perspective. Needless to say, the first observation is that the Austonian is really, really, really tall. From the 56th floor, the Monarch looks tiny and the top of the Frost Bank Tower is far below. Even the 44-story 360 tower is much, much smaller. It is so tall that your ears will inevitably pop on the way up and down in the high speed elevators. At night, the city streets stretch out endlessly in almost every direction while the capital glows and the lights of sixth street flash their bright colors.

There will be at least one more opportunity for non-residents to get a look at the amazing view before residents begin moving in June. In May, the Austonian will be the site of the Women's Symphony League of Austin's 2010 Symphony Designer Show house which will be open to the public. It will be a great chance to see what can be done visually with a high end condo.

Photos by blimpphoto.com
Austonian Austin Condo View North
Austonian Austin Condo View West

Update: New Central Library Progress

The City of Austin has more residents than the cities of Boston (although the Austin MSA is smaller than the Boston metropolitan area), Seattle and Nashville. Austin's central library is 110,000 square feet - 1/5 the size of Boston's main library, 1/3 of Nashville's, and 1/5 of Seattle's. The Austin central library seats 300 people while Boston's library seats 4,400. Austin has 75 public computers vs. 550 in Boston and 400 in Seattle.

Right now, the City is actively working on plans for a flagship central library to be located where Shoal Creek crosses Cesar Chavez facing out over Ladybird lake. The project is slated to be designed by top notch Texas architects Lake|Flato. Additional details are scheduled to be released when the proposal goes before the City Council in February.

Lake, who leads the design of Austin's new central library for Lake|Flato, said the design team is currently reconciling wish lists with budgetary realities. Collaborating architectural firm Shepley Bulfinch is leading the programming phase; the work reflects ideas and input gathered from Austinites and library staff at a series of meetings in November.

According to the Chronicle, the design team is also considering how the library will interact with the site and surrounding urban fabric. "We are keen on making this library a gateway to Downtown, Lady Bird Lake, Shoal Creek, and the trail system," said Lake. The building will be sited right on the shore of Shoal Creek, across Cesar Chavez from the lake. "Libraries are becoming more public-spirited buildings – a city living room," he said. "For Austin, it makes perfect sense to engage the creek and the river. Wouldn't it be great if people could sit out on the library's porch?"

The City's pitch for a new central library is based on the argument that a Central Library with a rich collection of materials and a wide range of services is vital for the continued health of the Austin library system. The hope is that a new library would "foster intellectual energy and excitement among its citizens. It would become a community destination, bringing citizens of all ages to the central business district for pursuit of leisure reading, social interaction, lifetime learning experiences, and for the experience of being in a cultural showcase for the arts."

The current list of ideas envisioned for a new Central Library
include:

- A building located in the emerging civic/cultural center of downtown which would be an architecturally and aesthetically important destination for both residents and visitors
- At least 300,000-400,00 square feet of space to accommodate an in-depth and growing collection for current and future needs
- Rooms for community events and meetings, as well as a public auditorium seating up to 300 persons
- Exhibit and display space
- A separate space for children’s programs
- Additional public computers and classrooms for computer-aided instruction and distance learning for the public and library staff
- Connections for customers who bring in their own laptop computers
- Expanded seating space including designated quiet study areas, group study areas, and lounges
- Parking for 350-475 cars
- Coffee shop, gift shop, and book sales areas
- Drive-up window for quick book return and pickup of reserved materials
- Expanded collection of periodicals, journals, and newspapers
- Collections in world languages and services for non- English speakers and new immigrants

We'll continue to track the library's progress as new details emerge over then next month.

Sabine Auction Planned for February

After a tenant lawsuit and a recent foreclosure posting, it looks as if 27 of the 44 long-vacant remaining units in the Sabine are finally headed to auction on February 28th.

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 in 2007 and the majority of units still remain vacant although they have been removed from the market due to pending litigation.

The project has been plagued with problems. A year ago, 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 problems included elevator issues (a 12/29/08 elevator inspection exposed 19 code violations including some that were described as serious safety problems), problems with water leaks, window seals, and sound-proofing, and failure to pay property taxes on more than 40 units.

In addition, Compass bank has twice posted the property for foreclosure.

Now, the developer has settled with the tenants and turned control of the HOA over to the current Sabine owners -- an unusual move for a project with so many vacant units. In addition, the developer has committed to major renovations to remedy the issues raised in the lawsuit. With the lawsuit gone, the developers are able to pursue their long-rumored plan to auction off the remaining units. The auction date for 27 of the 44 units has been set for February 28. It is not clear what will be done with the remaining 17 units.

The Brazos Place auctions (as well as the sale of deeply-discounted Shore properties) showed in an even more difficult market that there is strong demand for highly discounted downtown Austin condo units. For potential bidders, auctions like this typically bring a 25-30% discount off the original prices. In the case of the Sabine

21c Austin: Condos Out, Apartments Possible

In December, the 21c team returned to Austin to comment on the Waller Creek plan and to discuss their future intentions for their prime Waller Creek site adjoining Red River and Cesar Chavez downtown.

For those of you unfamiliar with the history, the project was originally scoped as a 44-story condo and hotel project on third and Brazos street. In a surprise move, the developers abandoned the planned third and Brazos project in favor of a new multi-building complex to be located a few blocks East on Waller Creek.

The new project, also to be named 21c, was slated to include a 16-story hotel with 243 rooms which would be followed by a 49-story condo tower. The hotel was supposed to break ground in 2009 and the condo tower was supposed to break ground by 2010. Then, the project became a victim of the financing crisis that has scuttled most of the other unbuilt Austin projects.

Fortunately, the developers keep trying to make the project work. In December, the 21c provided a basic overview of their current but unfunded plans for the site. First, the condos have been eliminated. In the current environment, it is simply not possible to fund a new high-end condo project in downtown Austin. Instead, the developers are focusing on a 31-story 350 unit apartment tower near the corner of Red River and Cesar Chavez. Rents would start at $1.50 per square foot which would mean $1,000 / month for a 700 square foot unit or $1,500 for a 1,000 square foot unit if they are able to hit the low-end of the target range. The goal would be to make the building 70% 1 bedroom / 1 bath units. As many as 10% of the units for be designated as affordable units with controlled rents.

The second tower -- which is more precarious in the current environment -- would be a 12-story 200 room hotel, spa, and restaurant. The developers are hoping to put parking underground and include ground retail in the project. Although no specifics have been announced, the third tower could include condos if at some point it does get built.

Since the plan remains unfunded, the project is not likely to rise anytime soon. But the fact that the developers are actively working with the city and still try to line-up funding means that a 21c project may be yet to rise.