Daily Briefing: 🚀 Austin Soars in Jobs, Texas Outshines California in Business Boom! 💼

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

1. Texas eclipses California, becoming a business magnet with significant company relocations. 🚀

2. Amazon's new Round Rock facility marks a major commercial real estate boost. 🏗️

3. Highland Village's $42.1M retail center sale reflects a thriving Texas market. 💰

4. Austin's economic allure strengthens as it ranks 5th in U.S. job opportunities. 💼

Commercial Real Estate Development and Investment Opportunities in Central Texas

More companies choosing Texas over California

Source: The Center Square

Summary: Texas' favorable business climate continues to attract companies leaving California, with over half of the 237 companies that have left California since 2005 choosing to relocate to Texas. In 2022 alone, the Frisco Economic Development Corporation reports that 16 companies, including Wiley X and Informativ, moved their headquarters to the city of Frisco. McAfee also moved its regional headquarters to Frisco while retaining its corporate office in San Jose, California.

Why this matters: The shift of companies to Texas, particularly to cities in the Metroplex, could lead to an increase in demand for commercial real estate, creating opportunities for commercial real estate professionals in Central Texas to offer valuable location advice to businesses and investors.

New Amazon facility coming to Round Rock

Source: KXAN

Summary: The Round Rock City Council has approved a 149-acre Amazon site near the intersection of CR 172 and McNeil Road. The facility is anticipated to serve as a data center or warehouse and distribution center. The project, which was paused in spring of 2022, is now expected to create 150-200 jobs and is slated for completion by 2025.

Why this matters: The establishment of this new Amazon facility signals a boost in commercial real estate demand in the Round Rock area, providing opportunities for professionals to capitalize on increased interest and potential growth in surrounding properties.

Highland Village retail center sold to investor partnership

Source: Newstalk Texas

Summary: The Marketplace at Highland Village, a 450,000-square-foot retail center located at 3060 Justin Rd., has been sold to an investor partnership for $42.1 million. The shopping center, which is 90% occupied, hosts notable tenants including Walmart, TJ Maxx, HomeGoods, LA Fitness, DSW, and Petco. The purchasing partnership includes New York-based Cohen & Steers Income Opportunities REIT Inc. and Florida-based Sterling Organization.

Why this matters: The acquisition of a high-occupancy retail center in Central Texas underpins the strength and vitality of the commercial real estate market in the region, indicating opportunities for investment and growth, which can be leveraged by professionals for client advisory or strategic investments.

Slate plans $65M apartments in Round Rock

Source: The Real Deal

Summary: Slate Real Estate Partners is planning to construct a $65 million, 358-unit multifamily development named Settlers Ranch in Round Rock, a rapidly growing satellite city of Austin, Texas. The development will include both townhomes and apartments, along with amenities like a dog park and pool, and is expected to cover 446,000 square feet of space. Completion is anticipated in June 2026. Despite an influx of new apartments in the area, Slate remains confident in the Austin market, with 1,362 units currently under construction in high-growth areas like Buda, Leander, and Cedar Park.

Why this matters: The insight from this development project can assist commercial real estate professionals in gauging the current trends in the multifamily market around Austin, allowing them to advise clients on potential opportunities for investment or development in this growing sector.

This Austin metro area is 2nd best in the U.S. for middle-class

Source: Austin American-Statesman

Summary: The Austin-Round Rock-Georgetown metropolitan area has been ranked the second-best area in the U.S. for the middle class, according to a 2022 report by the Ludwig Institute for Shared Economic Prosperity. The ranking was based on unemployment rates, average weekly earnings, and cost of living changes since 2005. Despite 34% of Austin metro residents not earning enough to meet their basic needs, the average household had over 25% of its income left after paying for necessities in 2022. The area's unemployment rate stood at 42.8% in 2022, and its cost of living has risen by 60% since 2005.

Why this matters: The economic health and quality of life in the Austin-Round Rock-Georgetown metro area, emphasized by this report, could attract a higher influx of businesses and workers, indicating potential growth areas for commercial real estate professionals in Central Texas.

Austin Children’s Academy to expand into 2nd building in far Northwest Austin

Source: Community Impact

Summary: Austin Children's Academy, a Montessori school located in far Northwest Austin, is planning an expansion into a second 3,500-square-foot building adjacent to its current campus. The expansion, slated for completion by summer, includes enhanced activity areas, teacher training facilities, and additional classrooms for a new elementary program.

Why this matters: As Central Texas commercial real estate professionals, this expansion signifies a growing demand for educational facilities in the region, potential for future development projects, and opportunities for clients interested in similar commercial properties.

Applications open soon to build three homes on one lot through Austin's new HOME Initiative

Source: Austin Business Journal

Summary: Austin's HOME Initiative is accepting applications soon, allowing developers and homebuilders to construct up to three homes on a single lot. This is expected to drastically reshape residential development in Austin and the article also provides a list of local custom homebuilders.

Why this matters: This initiative opens up more opportunities for commercial real estate professionals, especially those dealing with residential developments, to capitalize on land use in Austin, which can provide a competitive edge in the market and improve their portfolio.

Want to live in a home without the ownership duties? Check out this new Round Rock project

Source: Austin American-Statesman

Summary: Urban Moment Development has started leasing for its multifamily housing project, YardHomes Meadow Lake, in Round Rock, Texas. The project, consisting of 247 rental homes, offers a unique approach to multifamily living - single-family rental homes with private fenced-in yards. Rentals will range from $1,650 to $2,830 a month for one, two, or three-bedroom homes. The community will feature amenities like stainless-steel appliances, smart technology, lounge areas, a fitness center, a pool, and dog parks. With other similar projects underway in Leander and Hutto, and more planned in North Austin, Pflugerville, and Georgetown, Urban Moment is driving the build-to-rent trend in the Austin region.

Why this matters: Recognizing the rising trend of single-family rentals in the Austin area can offer commercial real estate professionals an edge in advising their clients on investment opportunities, enabling them to better meet the evolving demands of the market and potential renters.

Residential Development and Housing Trends in Central Texas

Single-family Austin neighborhood makes room for first multifamily units

Source: Newstalk Texas, Real Estate Center at Texas A&M University

Summary: A 3.7-acre site at 7606 Albert Rd. in Austin has been rezoned for the development of townhouses and condominiums, allowing for 46 residential units – a shift for the predominantly single-family neighborhood. The project is being led by Albert Road Horizontal Investors LP, backed by The Geyser Group.

Why this matters: This rezoning development opens up new investment and leasing opportunities for commercial real estate professionals, especially those with expertise in multifamily properties in the evolving Central Texas market.

New Braunfels' Devereaux apartment complex to open in March

Source: Newstalk Texas

Summary: The Devereaux, a $51 million multifamily apartment complex, is nearing completion in New Braunfels off Loop 337. Consisting of 240 units in a single four-story building, the complex will offer studio and one-, two-, and three-bedroom apartments at market rates, with amenities like a resort-style pool, fitness center, dog park, outdoor kitchen, and clubhouse. The complex, insured by the U.S. Department of Housing and Urban Development, is set to be move-in ready by mid-March.  

Why this matters: Understanding the emerging residential developments in Central Texas can help commercial real estate professionals to identify potential investment opportunities and to advise clients looking to diversify their holdings.

Business and Economic Growth in Central Texas

Austin ranked best city in Texas — and 5th best city in the U.S. — to find a job

Source: Austin American-Statesman

Summary: Austin has been ranked fifth-best city in the U.S. to find a job by WalletHub. The study compared 182 cities and took into consideration factors such as the number of job opportunities, employment growth, average monthly starting salary, and housing affordability. The city experienced a significant 40% growth in tech jobs between 2020 and 2022. Texas cities Plano and Irving also ranked well on the list.

Why this matters: The rising job market in Austin, especially in the tech industry, signifies a potential increase in demand for commercial real estate, offering promising opportunities for real estate professionals to explore new developments and investments in the city.