Daily Briefing: 🚀 Austin Soars in STEM & Hsu Revamps Bungalow into Tech Haven! 🏡

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

1. Austin cements STEM dominance, leads RCLCO Index again 🚀

2. $4.5M boost for Austin Playhouse's new arts center 🎭

3. Michael Hsu transforms historic Austin bungalow into luxe tech office 🏡

4. U-Haul ranks Austin as a top U.S. mover destination in 2023 🚚

Real Estate and Construction

Apartment rents have declined in Austin recently, but will the trend continue into 2024?

Source: Austin American-Statesman

Summary: Austin has experienced a 5.4% decrease in apartment rents as of November, a trend expected to continue into 2024 due to an uptick in multifamily construction and slowed job growth, primarily in the tech sector. The decline, which is greater than the national average, is seen as a breather for renters and prospective homebuyers in Austin, with the substantial influx in rental supply offsetting high demand. The first residents are expected to move into the 300-unit Tacara at Weiss Ranch apartments near Lake Pflugerville in January.

Why this matters: This trend of decreasing rents resulting from increased multifamily construction and slowing job growth can influence commercial real estate strategies and investment decisions, highlighting potential opportunities for development and lease negotiation in the Austin multifamily rental market.

Michael Hsu converts 1900s Austin house into luxury office

Source: Dezeen

Summary: Michael Hsu Office of Architecture has transformed a 110-year-old bungalow into a luxury office space for technology and bio-science investment firm 8VC. Located on a half-acre lot along South Congress Avenue in Austin, Texas, this renovation preserves original details while modernizing the space. The 4,845-square foot workspace includes multiple production, meeting, and gathering spaces, with a sophisticated interior design that balances modern and vintage elements. Noteworthy features include a wrap-around plaza, glazed exterior corner connecting the interior and exterior, central enfilade, hearth spaces, and a large outdoor gathering area.

Why this matters: Understanding the potential of repurposing and modernizing historical properties can provide commercial real estate professionals with unique opportunities to offer their clients distinctive, character-filled office spaces in Austin's sought-after locations.

Austin ranked among top 5 destinations for movers in 2023, per report

Source: CultureMap Austin

Summary: Austin, Texas has been ranked as the top destination for movers in the state and fifth in the U.S., according to the latest "Top Growth States Report" by U-Haul. This marks the third consecutive year Texas has held the top spot. Tech giants like Oracle, Tesla, Google, and Apple are driving massive growth, attracting tens of thousands of employees from states like California and New York. Despite an 11% drop in DIY movers to Texas, they still made up 50.4% of all one-way U-Haul traffic in and out of the state in 2023. Cities behind Austin as top U.S destinations include College Station-Bryan (No. 6), Dallas (No. 9), and Conroe (No. 16).

Why this matters: Understanding this trend provides commercial real estate professionals the opportunity to strategically position properties to incoming businesses and employees, thereby delivering value to their clients.

Economic and Business Development

Austin Soars To STEM Supremacy: Texas Capital Tops STEM Index For Fifth Time

Source: Benzinga.com

Summary: Austin, Texas, leads the RCLCO STEMdex for the fifth time in seven years, ranking as a top city for current economic conditions, quality of life, and workforce quality. Austin's STEM job growth is indicative of a strong business climate and high-quality demographics. However, the city's appeal is slightly dimmed by increasing office costs and a relatively small airport currently under expansion. The average wage for STEM jobs in the 50 largest MSAs is $108,000 in 2022, compared to $67,000 for all other industries. The importance of science and engineering continues to grow, with advancements in life and biosciences, robotics in manufacturing, and EV plants.

Why this matters: The concentration of high-wage STEM jobs in Austin indicates a robust economy and demand for quality real estate, creating real opportunities for commercial real estate professionals to cater to this affluent and growing workforce.

Austin theater gets $4.5 million for most permanent home in decades

Source: CultureMap Austin

Summary: Austin Playhouse, a community theater with more than 20 years of history in Austin, has received a $4.5 million investment from the Austin City Council for its new arts center. This financial boost, recommended by the Austin Economic Development Corporation, propels the theater into the final phase of construction for its permanent home. The center will feature two theaters, rehearsal and classroom spaces, and an inclusive lobby, aiming to serve as a cultural hub for the city. Despite pandemic-related delays and rising construction costs, the theater maintains its vision and continues fundraising efforts.

Why this matters: This development highlights the ongoing commitment of the Austin City Council and the Austin Economic Development Corporation to enriching Austin's cultural sector, indicating a growth in the local arts scene that could attract more residents, thereby potentially increasing demand for commercial real estate in the surrounding areas.