Here are some Austin Real Estate Stats to chew on:· 15,400 apartment units under construction as of Q3 plus 3,175 more started
· 10,663 apartment units scheduled to start from 9/2013 to 9/2014.
· 1,000 room JW Marriot scheduled to open in early 2015
· 50-story Fairmont scheduled to break ground in early 2014.
· IBC Bank Plaza scheduled to be completed in July 2014.
· 220,000 square feet Champion Office Park at 6500 N. Capital of Texas Highway will be completed in October of 2014
· 221,000 square feet Domain 7 at 11501 Alterra Parkway will be completed in November of 2014
When 2013 arrived, the mood among Austin real estate professionals mostly was upbeat. The apartment market was on fire with thousands of units under construction or in the pipeline and occupancy rates topping 95 percent.
According to Robin Davis, the apartment expert who publishes The Austin Multi-Family Trend Report, about 15,400 units were under construction in the third quarter of 2013 with another 3,175 units started. In the 12 months from September 2013 to September 2014, another 10,663 are scheduled to break ground.
Eldon Rude, the founder of 360° Real Estate Analytics consulting firm, thinks there will be plenty of demand as long as job growth remains strong. “If Austin continues to produce jobs at the rate we have seen in recent years — the region added nearly 24,000 new jobs in the 12 months ending in October — most of the new projects would do fine,” he said. “But if the area’s job growth were to slow for some reason in the coming months, I suspect some of the new projects would struggle during their lease-up period.”
Another hot market has been the hospitality sector, with the construction of the downtown JW Marriott at full speed — despite a nearly catastrophic disagreement with the city of Austin over tax and fee incentives. The developers who forged ahead with the construction of the 1,000-room hotel plan to deliver the goods in early 2015. The same company also broke ground on the smaller Westin Austin downtown, which should be delivered about the same time. Throughout 2013, numerous boutique hotels broke ground, and more are in the planning stages. All eyes will be on the proposed 50-story Fairmont Austin hotel to see whether it actually breaks ground in early 2014. It was suppose to begin construction this fall but several factors, including city regulations, delayed the mega-project.
Office demand improves
Office development turned the corner in 2013 after years of little construction. During the first few weeks of 2013 no one was quite sure what would transpire, especially if developers had to move forward on a speculative basis. Financing has been much harder to obtain for projects outside the apartment realm, which can rely on Fannie Mae and Freddie Mac money. Capital is even tougher to come by when there is little or no preleasing. But it didn’t take long for the pent-up demand to translate into new construction. The IBC Bank Plaza being developed by Austin-based Endeavor Real Estate Group at 500 West Fifth St. will be the first major delivery of office space in more than a decade. It’s scheduled to be completed by July.
Endeavor, with a long history of creating a wide range of real estate products, has several developments projected to be finished this year, including 311 Bowie, a downtown apartment and office mixed-use development, which should be done by November. Champion Office Park at 6500 N. Capital of Texas Highway will deliver 220,000 square feet of office space in October, and Domain 7 at 11501 Alterra Parkway will deliver 221,000 square feet of office space, also in November.
Other projects set for completion in 2014 are Skyhouse, the apartment tower on Rainey Street; Lamar Union, the mixed-use development that will include apartments and a bevy of local retailers including Alamo Drafthouse and the Highball on South Lamar Boulevard, as well as the completion of The 704 at the Broken Spoke, Gibson Flats and Hanover South Lamar — all along the same strip.
Housing prices up
Meanwhile, the single family housing market — both new and re-sale — is as strong as its ever been, with homebuilders aggressively seeking land and residential real estate agents putting up impressive numbers as demand outweighs supply and median prices continue to rise.
“All in all, Austin’s real estate industry will move into 2014 keeping its incredible pace and level of activity and should see that pace and activity sustained throughout the year,” said Nikelle Meade, partner at Husch Blackwell LLP and president of the Real Estate Council of Austin.