Daily Briefing: 🏗️ Austin Booms with 1,000 Homes & citizenM's Chic Debut 🏨

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Here’s what you need to know about CenTex CRE Today:

• 1,000 new homes to transform northeast Austin, thanks to Tri Pointe Homes 🏡

• citizenM's 344-room Austin debut marks a new era in downtown hospitality 🏨

• Austin's HOME initiative reshapes housing policy, inviting tiny homes and more 🏠

• Historic Palm House relocation in Round Rock paves way for urban renewal 🌳

Real Estate Development and Construction Projects

Dirt turns on new subdivision expected to bring 1,000 homes to northeast Austin

Source: Austin American-Statesman

Summary: Tri Pointe Homes has begun construction on a new subdivision called Lagos Austin, located in northeast Austin. The builder, in collaboration with Ashton Woods, plans to add 1,000 homes over several phases, with the first phase comprising 112 homes on the 147 acres Tri Pointe Homes purchased. The homes will range in size from 1,800 to 3,000 square feet and are accessible to major highways, toll roads, and employment centers like Tesla's auto manufacturing facility. Sales are expected to start late this year or early next year.

Why this matters: The Lagos Austin development offers commercial real estate professionals an opportunity to capitalize on the high demand for residential properties in Austin's fast-growing northeast region, thereby expanding their portfolio and potentially enhancing their revenue streams.

Patrinely, Realterm Break Ground on Austin Industrial Campus

Source: Commercial Property Executive

Summary: Patrinely and Realterm have begun construction on a 439,300-square-foot speculative industrial project called Airfield 130 in Austin, Texas. The development will span four buildings and is anticipated to be completed in the first quarter of 2025. The project's strategic location provides instant access to key transportation nodes, including Highway 130 offering connectivity to Austin Central Business District, Tesla Gigafactory, and growing Austin suburbs. Austin has emerged as a national leader for industrial development, ranking fifth nationwide for new industrial construction starts in 2023.

Why this matters: The development of Airfield 130 underscores the robust growth in Austin's industrial real estate sector, which offers commercial real estate professionals potential opportunities to cater to clients seeking industrial properties or spaces with optimal access to key Austin areas and transportation routes.

First phase of Austin's HOME initiative rolls out Monday

Source: KXAN News

Summary: Austin's newly approved HOME initiative, focusing on amending the Land Development Code (LDC), commences its first phase, which includes permitting three residential units on single-family zoned property, including tiny homes, and the removal of restrictions on the number of unrelated adults living in a house. The initiative, proposed by Austin City Council Member Leslie Pool, seeks to enhance housing options for the middle-income bracket, despite concerns about potential gentrification and the proliferation of short-term rentals.

Why this matters: This initiative's introduction creates a new landscape for commercial real estate professionals in Central Texas, potentially offering more investment and development opportunities in Austin's residential sector while requiring careful navigation of community concerns about gentrification and short-term rentals.

PHOTOS: Historic Round Rock home moved to new location Tuesday night

Source: KXAN

Summary: The Palm House, a historic home built in 1873 in Round Rock, Texas, was successfully moved overnight from Main Street to the Old Settlers Association grounds. The vacated Main Street location will be transformed into a connecting walkway between Prete Plaza and the Round Rock Public Library courtyard. This is part of a larger project to renovate the 44,000-square-foot Griffith Building, which will host the Round Rock Visitors Center, a two-story arts and culture gallery, and the Round Rock Chamber.

Why this matters: The ongoing development and transformation in Round Rock, as highlighted by the Palm House move and Griffith Building renovation, signifies an increase in commercial opportunities. Commercial real estate professionals can use this information to position properties in the area as part of a growing and dynamic community investment.

Dripping Springs planning director discusses ETJ release

Source: Hays Free Press

Summary: The city of Dripping Springs, Texas, has approved the release of 14 properties - both residential and commercial - from its extraterritorial jurisdiction (ETJ), a decision brought on by the passage of Senate Bill 2038. The legislation, which came into effect in September 2023, permits residents of an ETJ to withdraw from the city's authority through a vote or petition. Once a property is released from the ETJ, the city relinquishes its regulatory control, and property owners will deal with the county for permitting. The move could lead to development issues, particularly around drainage and erosion control from unrestricted clear-cutting of trees. This change also impacts the city's ability to install sidewalks and collect Hotel Occupancy Tax in those areas.

Why this matters: This shift in property governance under the ETJ could provide commercial real estate professionals with new opportunities for less regulated development, but they must also be mindful of potential neighborhood compatibility or environmental issues that could impact their client's property values.

Commercial Real Estate Market and Investments

DataDigest: National rent price growth normalizes, while Austin rents lose steam

Source: HousingWire

Summary: The CoreLogic Single-Family Rent Index reports a normalization in the growth of national rental prices while Austin’s rental market sees a decrease in single-family rental prices due to an increase in multifamily units. The index tracked a 13-15% annual growth in rental prices in the first half of 2023, but the value rose only 2.7% in November. Despite a five-month trend of declining rents in Austin, the city's average rent price was still 23% higher in November than in February 2020, and CoreLogic expects rental prices to continue to grow 2-4% per year in the near term.

Why this matters: This information provides insight into the shifting dynamics of the rental market in Austin, enabling commercial real estate professionals to make informed decisions regarding their investment strategies and client advisories, particularly in the multifamily sector.

Transwestern picked as leasing agent for big Austin office portfolio

Source: Austin Business Journal

Summary: Transwestern Real Estate Services, a major player in the commercial real estate industry, has been chosen as the exclusive leasing agent for over half a million square feet of property owned by an LA-based company, expanding its Austin office portfolio. The report also provides a list of multitenant office parks in the Austin area.

Why this matters: The article's details about the new properties under Transwestern's management could provide Central Texas commercial real estate professionals with information about potential leasing and buying opportunities, allowing them to better serve their clients in search of space.

Harmony Public Schools Signs 7,211 SF Office Lease Extension in Northwest Austin

Source: REBusinessOnline

Summary: Harmony Public Schools has renewed its lease for a 7,211-square-foot office space at Amber Oaks in northwest Austin, with Equitable Commercial Realty representing the landlord and Nick Boyd Real Estate representing the tenant in the negotiations.

Why this matters: Knowledge of ongoing commercial lease transactions, such as Harmony Public Schools' lease extension, is valuable for commercial real estate professionals, as it provides them with an understanding of the current leasing market trends in Central Texas, which can inform their strategy in serving their clients.

CInfrastructure and Urban Development

Austin Animal Center to eliminate use of pop-up crates in compliance with state law

Source: KXAN News

Summary: The Austin Animal Center has decided to eliminate the use of pop-up crates to house animals, as part of an effort to comply with state law and address issues raised by a recent audit. This change is expected to reduce the center's capacity for animal intake. In response, city staff are considering expansion to additional locations and the real estate division is actively exploring potential sites.

Why this matters: Commercial real estate professionals can keep an eye on this development, as it could lead to an increase in demand for appropriate properties for the Austin Animal Center's expansion.

Georgetown approves $32M sidewalk master plan

Source: Newstalk Texas

Summary: Georgetown has approved a $31.64 million Sidewalk Master Plan aimed at filling in sidewalk gaps within city limits and supporting projects near local schools to create safer routes. The projects are divided into four priority tiers: public schools, sidewalk gaps, downtown, and small capital improvements over 200 feet. The cost breakdown includes $7 million for public school projects, $22.82 million for sidewalk gaps, $775,000 for downtown, and $1 million for small improvements over 200 feet.

Why this matters: The approval of this master plan provides an opportunity for commercial real estate professionals in the area to leverage this upcoming infrastructure improvement in their marketing strategies, highlighting increased walkability and safe routes to schools, thus potentially increasing property values in Georgetown.