Whiskey Tango Foxtrot
Join Date: Oct 2009
Location: ELP ~ ABQ
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Austin Goin' Nuts!
In Texas’s Capital, Construction on Many Corners
Third and Brazos, a 277-unit apartment project, is part of the increase in residential and commercial development in Austin, Tex.
By MATT HUDGINS
Published: August 14, 2012
AUSTIN, Tex. — Amit Sudharshan, 28, dons shorts and flip flops to walk the two blocks from his downtown apartment here to his job as a quantitative researcher at RGM Advisors. The high-frequency trading company based here shares a floor of the Chase Bank Tower with the more conservatively dressed workers at the offices of United States Senator John Cornyn.
Mr. Sudharshan and his wife, Megan Guse Sudharshan, are among the wave of young residents who have embraced a fledgling urban lifestyle in Texas’s capital, where Cirrus Logic recently constructed a new downtown headquarters and Facebook, Google and other high-tech employers have set up shop alongside the lobbyists, lawyers and professional service providers who have traditionally filled office space in the central business district.
The combination of a diversifying business center and Austin’s renowned entertainment scene has recently drawn an influx of young and highly educated workers downtown. To meet their housing needs, about 500 apartments are under construction and several developers are poised to begin construction on other residential projects. But apartment buildings are not the full extent of this downtown resurgence. Several hotels are under construction, and there are plans for at least two substantial office towers and multiple mixed-use projects. “What’s happened in downtown over the past seven years is that the office space was here, the housing came, and retail is arriving last to the scene,” said Mike Kennedy, president and chief executive of a local real estate firm, Commercial Texas.
Downtown residences are relatively new to Austin. Rental apartment construction started in the late 1990s, with residential condominium development following in the early 2000s. The recession curbed condo sales and is now ushering in this latest round of rental development. The city’s central business district has about 1,500 residential condominium units and 1,500 rental apartments, according to Capitol Market Research, a real estate consulting firm here. Downtown living has proved remarkably popular, with a rental occupancy rate of almost 97 percent, nearly equal to the citywide rate of 97.8 percent, according to Capitol Market Research. “Living downtown is great,” said Mr. Sudharshan. “We’ve gone months without driving anywhere except to go to the airport.”
Landlords are raking in profits: The citywide average monthly apartment rental rate of $1.10 a square foot is the highest in the state, and downtown apartment rents are more than twice the city average, according to Charles H. Heimsath, president of Capitol Market Research. “Downtown has developed such a charisma that people just really want to be downtown and are willing to pay, particularly young people in the 25-34 age group,” Mr. Heimsath said.
Lenders are still cautious about condominiums, but have backed several hundred rental apartment units now under construction. Riverside Resources, a developer here, is midway through construction of Third and Brazos, a 277-unit apartment project just a block east of Congress Avenue, which runs north-south through the center of downtown. Gables Residential is digging the foundation for Gables Park Plaza II, which is planned as a 222-unit, 18-story apartment building eight blocks west of Congress and overlooking Lady Bird Lake, a center of activity for runners and boaters. Several other developers are prepared to begin multifamily construction in the heart of downtown, which is bound by the lake on its southern edge and the Capitol building to the north. Its general boundary on the east is Interstate 35 and on the west is MoPac Boulevard.
Hotel development is heating up as well. White Lodging Services, a corporation in Indiana, is building a 1,012-room JW Marriott convention hotel, scheduled to open in 2015. Closer to the Austin Convention Center, Manchester Texas Financial Group plans to break ground next year on a 1,000-room Fairmont Austin hotel. The 300-room Hyatt Place Hotel is under construction one block west of the convention center.
Anyone who reads the development news here knows: Austin is goin' nuts!