Daily Briefing: 🏗️ Building Boom! Symphony Square & Solar Surprises in Austin ☀️

September 12th, 2023 News Brief TLDR:

1. Austin faces negative rent growth due to high supply, weak demand. 📉

2. Cullen/Frost Bank dubbed an excellent buying opportunity for investors. 💰

3. Greystar nears completion of Austin's Symphony Square, a major mixed-use project. 🏗️

4. Radial Power finalizes Austin's largest solar project at Paloma Ridge. ☀️

REAL ESTATE & HOUSING MARKET

Are rents falling? Apartment association sees construction, weak demand causing ‘negative rent growth’

Source: AustinMonitor.com

Summary: A combination of weaker renter demand and new multifamily construction have led to a decrease in rents in the Austin market, according to the Austin Apartment Association. Negative rent growth is forecasted due to construction projects aligning with demand trends that began five years ago. High supply is expected through at least early 2025, particularly in surrounding cities such as Pflugerville and Round Rock seeking to cater to the demand for affordable housing. Despite federal guidelines for affordability, challenges remain in addressing intersecting factors of high median family income, policy barriers to affordable unit construction, and funding difficulties. Initiatives like Austin's SMART Housing and Affordability Unlocked are making efforts to reduce project costs and planning/zoning barriers while advocating to sustain housing affordability.

Why this matters: Understanding the declining rent trend and surge in multifamily unit construction in Austin and surrounding areas can better equip real estate professionals in advising commercial clients on investment and development strategies, and responding proactively to the market demands.

Grant Cardone Reveals 6 Cities He Would Buy Investment Property in Right Now (and Where He Would Avoid)

Source: GoBankingRates.com

Summary: Real estate mogul Grant Cardone reveals cities he believes are valuable for investment property, citing Austin as a prime choice due to expected population climbs. Predicting that Austin will grow its population to about 10 million in the next 20 years, Scalar said, "It's going to explode." He advises purchasing property selectively, focusing on areas where economic stability and prosperous growth are projected. Regions with negative job positions and ineconomic progression should be avoided, as indicated by Cardone.

Why this matters: Austin-based commercial real estate professionals can leverage this insight to capitalize on Austin's projected population boom, guiding promising investments within the area based on expected property demands equivalence.

Work Winding Down on Austin, Texas, Mixed-Use Project Greystar Real Estate

Source: CreNews.com

Summary: Partners is nearing the finish of a significant mixed-use development in downtown Austin called Symphony Square which consists of a 32-story residing space harbouring 388 units and a seven-story office space comprising of 170,000 square feet. The project took its initiation in June 2021.

Why this matters: This development stands as a testimony to the bustling commercial real estate development in central Texas, further positioning Austin as a viable investment location for diverse property portfolio managers, signal to investors the boom in demand for mixed-use projects in Central Texas, and mark Symphony Square as an enticing option for potential office space renters in downtown Austin.

Short-Term Rentals Cause a Long-Term Mess

Source: TexasObserver.com

Summary: Austin's residential real estate market is experiencing unprecedented growth with median home prices reaching a new high. There has been a consistent surge in demand while supply has drastically shrunk, leading to a strong seller’s market. Companies and high-paid professionals relocating from states like California contribute to the swell. Commercial real estate also sees simultaneous increase, primarily in the office space sector, as companies continue moving into the city.

Why this matters: Understanding these market dynamics enables real estate professionals to advise their clients accurately on strategic buying or selling decisions amidst the current intense competition.

FINANCE & INVESTMENT

Cullen/Frost Bank: Phenomenal Buying Opportunity For This Quality Texas Bank

Source: SeekingAlpha.com

Summary: Cullen/Frost Bank, the largest Texas-based and focused bank holding the market share of depositors and small t0 mid-sized business owners and commercial landlords, gets coverage as an excellent buying opportunity for investors with the undervalued stock price steeping dividends. Highlighting its Conservative Approach, Cullen/Frost was the only top ten Texas bank surviving the 1980's Saving & Loan crisis making its strong reputation for managing its commercial real estate loans, especially those backed by office buildings. Presently giving detailed insights on its portfolio, the durability of Cullen/Frost hinges on its diversified backup in coming tough situations: rising cost of deposits and challenging in-office utilization trends(interest rate normalization looming).

Why this matters: Acquainted knowledge of Cullen/Frost's banking decisions can throw light on current market trends, enabling professionals to relay essential information back to their clients about the financial climate, real estate loan prospects and make vital aiding decisions with investing.

SUSTAINABILITY & ENVIRONMENT

RADIAL POWER COMPLETES 3.35MWdc SOLAR PROJECT IN AUSTIN, BRINGING RENEWABLE ENERGY TO PALOMA RIDGE OFFICE PARK

Source: PRNewsWire.com

Summary: Radial Power, a leader in distributed clean energy solutions, has completed the installation of a large solar project at Paloma Ridge office park in Austin, Texas. The 3.35 MWdc solar system, the largest project connected to Austin Energy, includes rooftop and carport initiatives and aims to significantly reduce the carbon footprint of the real estate portfolio owned by Starwood Capital Group's affiliate. The installation illustrates the potential of solar power in the region, enhances the value and function of the property by bringing better energy costs and summer shading for tenants, reflecting a sustainable growth path long-term.

Why this matters: The advent of this substantial solar project underlines renewable energy's potential to enhance commercial real estate value in Central Texas - a factor that should inform realtors in strategizing property marketing while scout for properties with similar upgrades to deliver higher value to investing clients.