August 22nd, 2023 News Brief TLDR:

• Tokenized real estate reshaping Austin's investment landscape. 🌆

• CIM Group offloads iconic Austin creative office space. 🏢

• Downtown Austin's Hobby Building set for major redevelopment. 🚧

• Harbor Group's hefty reentry into Austin's multifamily market. 🏘️

REAL ESTATE & DEVELOPMENT

A Look at Tokenized Real Estate

Source: Caia.org

Summary: The article discusses Nada, a Dallas-based startup, and its innovative product, Cityfunds. Cityfunds allows individuals to invest in diverse portfolios of residential real estate in fast-growing U.S. cities, including Austin, Dallas, Miami, and Tampa. The funds work more like a passive ETF, hence differ from actively managed ones, as their performance aims to be solely determined by market movements. Nada plans a future secondary market partnered with North Capital, will provide enhanced liquidity allowing buyers of Cityfunds to trade shares anytime.

Why this matters: The digital transition of accessing real estate markets portrayed by Cityfunds opens an investible opportunity for real estate professionals and their clients in Central Texas, especially through its forthcoming Austin Cityfund. This flattens potential barriers, such as the traditionally required high capital investment or exact location selection.

CIM Group Sells Austin Creative Office Building

Source: CommercialSearch.com

Summary: CIM Group, a real estate investment firm, has sold Fifth + Tillery, a creative office building in East Austin, Texas, to Capital Metro, Austin's public transportation provider. The three-story office building spans a total of 182,700 square feet and was acquired for nearly $87 million. CIM Group bought the Fifth + Tillery along with two other properties in Austin back in October 2019 and redeveloped the building, which was completed in 2020. Despite recent sales, the CIM Group aims to continue expanding in Austin, with several other significant properties in the city.

Why this matters: Real estate professionals in Central Texas can use this trend of redeveloping existing structures into creative office spaces as an innovative sales strategy to cater to modern businesses looking for flexible and creative working environments.

Here’s How Downtown Austin’s Block-Sized Hobby Building Could Redevelop

Source: Austin.Towers.net

Summary: The State of Texas and the City of Austin announced plans to redevelop the downtown Hobby Building, a block-sized former state office complex at 333 Guadalupe Street. The building will feature workforce housing, aimed at households earning 60-100% of Austin's Median Family Income, targeting service providers such as teachers, nurses, and government workers. Texas Land Commissioner communicates the possibility of joint venture partnerships to scale workforce housing within the revitalized site. Mega-brokerage CBRE represents the state and is offering the Hobby site to developers, with potential to accommodate nearly 2 million square feet of mixed-use development.

Why this matters: The redevelopment will introduce substantial workforce housing projects to downtown Austin, indicating encouraging shifts towards affordable housing to urban real estate clients and enables commercial real estate professionals to identify partnership opportunities in centralized residential projects, diversifying their real-estate portfolio.

A multifamily shortage? New study promises at least some relief

Source: American-apartment-owners-association.org

Summary: The United States presently grapples with a shortage of affordable housing, with the National Multifamily Housing Council asserting the need for 4.3 million new apartment units by 2035. However, relief is on the horizon, with Yardi Matrix's Multifamily Supply Forecast predicting a ~7% increase in multifamily housing supply by the end of 2023. Over 1.1 million units are currently under construction with substantial growth in non-lease-up units, indicating a healthy pipeline. Yet, Yardi Matrix foresees the number of starts and deliveries tapering in 2025 and 2026. High apartment completion rates are expected in several markets, with Austin, Texas, leading with projected construction of 24,145 and 24,714 units in 2023 and 2024, respectively.

Why this matters: Austin commercial real estate professionals can leverage the expected boost in apartment construction by identifying emerging areas for development and advisory opportunities around these new spaces - assisting potential clients in tapping into viable investment and living options.

Harbor Group International Reenters Austin Multifamily Market with North Austin Acquisition

Source: PrNewsWire.com

Summary: Harbor Group International (HGI), a global real estate investment firm, has reentered the Austin market with the acquisition of The Warner, a luxury multifamily community in North Austin's suburb Round Rock. The Warner adds 336-unit worth to HGI's pre-existing multifamily portfolio in Texas and is currently at a 98% lease rate. With amenities such as a fitness center, lounge and smart home systems, The Warner's location provides residents with access to major employment hubs such as Dell's headquarters and Apple's Austin campus.

Why this matters: HGI's heavy investment into Austin's luxury apartment market points to the city being an attractive and growing hub for commercial real estate, signaling the escalating demand for high-quality residential complexes for real estate professionals.

Texas new home market remains “healthy”

Source: GlobalNewswire.com

Summary: The Texas new home market is currently healthy with improving pace of sales and stabilizing average prices, according to a HomesUSA.com New Home Sales Report. The report shows that in Texas' four biggest markets, the 3-month moving average of new home MLS sales slightly dropped from 5,803 in June to 5,649 in July, however it also predicts a seasonal cycle could lower sales in the upcoming months. Remarkably the new home price in these markets remains relatively stable. In Austin, the new home prices saw a slight decrease in July, with the average price sitting at $536,842 compared to $541,517 in June. Overall, the report suggests that the market is moving towards a balance of supply and demand.

Why this matters: Understanding the current trends in new home sales, especially the decrease in prices in Austin, allows real estate professionals to better strategize and deliver valuable insights to their clients considering to invest in new properties in the Central Texas region.

CityStreet Residential Partners Buys 224-Site RV Resort in Georgetown, Texas

Source: REbusinessonline.com

Summary: Houston-based CityStreet Residential Partners has acquired Stone Oak Ranch RV Resort, a 224-site property located in Georgetown, Texas, north of Austin. The previous constructor was The Boterra Group who finished the project in October 2020. The amenities at the resort include a pool, fitness center, dog park, playground, pickleball courts, and onsite laundry facilities. The new owner plans to rebrand the property under their Jetstream brand and is set to develop an additional 200 sites.

Why this matters: The acquisition demonstrates a trend in active real estate investments in the suburban areas of Austin. Real estate professionals can use this information to highlight the potential growth in property values in Georgetown and similar areas to their prospective clients.

AUSTIN’S TECH & BUSINESS LANDSCAPE

Technology continues to find fertile ground northeast of Austin

Source: CanadaConstructConnect.com

Summary: The cities of Pflugerville, Hutto, and Taylor, just northeast of Austin, are presently the center of commercial and industrial development attention in Texas. Tech giants including Amazon and Samsung have already dedicated billions of dollars to build factories in the area. A new development in the making is the 159-acre PowerCampus Austin data center, one of the largest of its kind in the country, by Skybox Datacenters and Prologis. The Hutto City Council has approved a tax abatement incentive for the center, expecting it to nearly double the city's revenue. Additionally, upcoming developments include a two-million-square-foot high-tech industrial space and a 31,000-acre former aluminum plant transformation into an industrial space. Significant investments are also being made to improve infrastructure, including roads and water lines.

Why this matters: The insight provided in this article about upcoming commercial and industrial developments around Austin can enable real estate professionals to position their clients strategically for new opportunities, particularly in the growing technology and data center markets.

Designer Profile: David Samuel Ko The article profiles David Samuel Ko

Source: HomesAndGardens.com

Summary: A renowned interior designer who blends fashion sensibilities with the finer points of architecture and design through his firm, Maison Ko. Born and raised in California and based in Los Angeles, Ko has gained experience and exposure through varied professional stints and collaborations. His firm, propelling a full spectrum of residential and commercial projects, stretches its work across Greater Los Angeles, New York, and notably, Austin.

Why this matters: Considering David Samuel Ko's work on upscale commercial properties globally, his reach in Austin can inspire Central Texas commercial real estate professionals to incorporate fashion-forward design aesthetics, elevating their project portfolios and differentiating them in the competitive Texas market.

Nearly 40 housing tech firms make the 2023 Inc. 5000 list

Source: HousingWire.com

Summary: The 2023 Inc. 5000 list, a tally of the fastest-growing private businesses in the U.S, features 37 real estate, mortgage, and housing tech companies - a comparative dip from the last year's 53. Among top performers on the list is CertifID, an Austin, Texas-based company specializing in mitigating wire fraud in the industry and one of the thriving companies making it to the top 200 list. The Missouri-based OptiFunder tops as 2023's fastest-growing housing tech firm whereas established techno-companies like Orchard, Homelight, and LoanStar Technologies continued their prominent presence in the prestigious list.

Why this matters: Keeping an eye on companies like CertifID, named on the Inc. 5000 list, enriches local Austin real estate professionals with potential integrations, partnerships, or tech advancements that could streamline their operations and provide heightened security for their commercial real estate transactions.

HOUSING MARKET ANALYSIS

Will The Austin Housing Market Crash?

Source: Forbes.com

Summary: The Austin housing market, while experiencing some current slowdowns in pricing, sales, and lowered list-to-sale prices, seems unlikely to crash. Data suggests moderation in market activity, not an outright crisis. Home prices, including in Austin proper and surrounding areas like San Marcos, Buda, and Lockhart, have generally trended higher than pre-pandemic levels. Inventory shifts vary by area, hath showing year-over-year growth or declines.

Why this matters: As commercial real estate professionals, understanding these consumer housing market trends provides valuable insight for capitalizing on residential-commercial hybrid opportunities, or gauging the financial health of potential renters in commercial spaces.

TODAYS PERMIT RUNDOWN

Natures Point made quite a splash yesterday in the Central Texas construction scene by announcing not just one, but two new construction projects. Both are geared towards adding top-notch amenities to this already desirable locale. The spotlight shines brightly on the Pool Building – a project that appears to be making serious waves. Yes, it seems Lago Vista is about to become an even more attractive destination.

Under the capable hands of Keith Walters, who's spearheading the projects as the owner, the work won't be anything short of spectacular. Walters has a reputation in the industry for laying solid foundations, building sturdy structures, and creating spaces that resonate with the local community.

With projects of this size, it's no surprise Walters has engaged the services of Duncan & Miller Design. Known in the industry for their innovative and elegant designs, Duncan & Miller Design are set to bring their A-game to these projects. They will be erecting new poolhouse buildings from the ground up, transforming the exterior and interior spaces into something extraordinary.

It appears Walters is not skimping on the budget, with an estimated cost of $5,000,000.00 apiece. That's a significant investment in enhancing the Lakeshore vibes, and a clear sign that these projects aim to deliver high quality and stunning architectural aesthetics.

The addresses for these exciting developments are 18206 Lakeshore Pointe, right in the heart of Lago Vista, TX 78645. With such grand plans underway, there's no doubt that these new constructions will become iconic landmarks in Central Texas, boosting the value and attractiveness of the local real estate market.

With these laudable developments, Nature’s Point is indeed poised to become a beacon of luxury and innovation in the Central Texas landscape. So hold on to your hard hats, folks. There's a lot more to come in this construction journey, and we'll be here to bring you all the exciting details as they unfurl.