September 9th, 2023 News Brief TLDR:

1. Multifamily starts plummet 52% in Q2, Austin hit hard - brace for inflation! 📉

2. LDG Development gears up for 615-unit Park at Northpoint in Dallas. 🏗️

3. Harbor Group snags 336-unit luxury The Warner in fast-growing North Austin. 🌆

4. UT Austin and Karlin Real Estate unveil 10,000-sq-ft life sciences lab.

REAL ESTATE & HOUSING DEVELOPMENT

Multifamily starts fall to under half of the previous two-year average

Source: NationalMortgageNews.com

Summary: Multifamily construction projects saw a significant decrease in Q2 which is 52% less than the quarter's usual construction starts, according to a report by Institutional Property Advisors (IPA). Interestingly, the decline seen in multifamily construction projects was worsened due to insufficient access to funds and capital. Additionally, fewer banks have been willing to allocate substantial capital consistencies to real estate, specifically multifamily projects. One side effect of this trend highlighted by IPA is that less construction will lead to inflated rents, an increase expected to start appearing in spring 2024. Particular hard-hit cities in Texas included Houston, Austin, and Dallas-Fort Worth where starts declined by 79%, 74%, and 67% respectively compared to the nine-quarter average.

Why this matters: As drastic fall-offs in new starts were reported in Austin among other Texas cities, commercial realtors can leverage this information to prepare clients for a potential surge in rent prices and formulate strategic plans based on updated market forecasts - while also diversifying their property portfolio into stabilized properties to counterbalance the risks.

More Multifamily is on The Way as LDG Development Plans Park at Northpoint Apartments

Source: CandysDirt.com

Summary: LDG Development has obtained permits and significant CDBG funding for the 615-unit Park at Northpoint development in Dallas, set to break ground in 2024. This mixed-income housing project, a product of the Public Facility Corporation financing structure, will offer a variety of one-, two-, and three-bedroom units. Primarily low-income families will be hosts, contributing to economic diversity in the surrounding area and forgoing tax collection in exchange for affordability.

Why this matters: As growing commercial real estate professionals, it's crucial to understand the nuances of mixed-income housing projects, PFC financing structures, and the important role of entitlement funds in promoting residential diversification and growth, as exemplified by LDG Development’s operations.

Harbor Group International Adds to Texas Multifamily Portfolio with Acquisition of 336-Unit The Warner in North Austin Market

Source: MultiFamilyBiz.com

Summary: Harbor Group International has expanded its portfolio in Texas with the acquisition of The Warner, a new 336-unit luxury multifamily property located in Round Rock, a suburb in North Austin. The Warner is nearly fully occupied, reflecting strong demand and performance for high-quality apartment housing in one of the fastest-growing cities in the US. The property offers top-tier amenities and is in walking distance to the corporate headquarters of several tech companies.

Why this matters: This news highlights the growing demand for top-tier multifamily properties in Austin's suburbs, a profitable trend that commercially-focused real estate professionals can leverage to their clients' advantage.

Crane Watch: New high-rises crowd Austin skyline

Source: BizJournals.com

Summary: New additions to Austin's skyline are in progress despite a noticeable slowdown in the large, new commercial real estate developments citywide. The companies pushing forward with new construction are covered, along with updates on condo sales and apartment leasing data for nearly finished high-rises, all consolidated in ABJ's Crane Watch database and map.

Why this matters: Clients would be interested in this development information, using for investment decisions whether that's in further commercial development or through latent effects on residential investment by the growth in jobs and housing demand that accompany these new additions.

The Chris Voss Show Podcast – Venkat Avasarala, Managing Principal & Founder of Stryker Properties on Real Estate Investing Opportunities and Market Conditions

Source: TheChrisVossHow.com

Summary: Venkat Avasarala, the experienced Principal & Founder of Stryker Properties, focuses on developing multifamily units and acquiring value-add workforce housing multifamily properties in favorable states, including Austin, Texas. He is currently-nurturing 2700 multifamily units across DFW, Austin, and Phoenix, and previously procured around 3600 rental units. His management portfolio stands at an impressive $150 million.

Why this matters: Understanding Avasarala's strategy and experience in executing developments and investments within Central Texas offers professionals insight into the current local multifamily real estate market's comportment and presents potential successful investment paths.

OTHER BUSINESS & ECONOMIC DEVELOPMENTS

University of Texas announces new off-campus lab as advancement of life sciences in Texas

Source: Kxan.com

Summary: The University of Texas at Austin, in partnership with Karlin Real Estate, is set to construct a new 10,000-square-foot off-campus laboratory at the Parmer Austin site in North Austin. The lab is intended to stimulate life science start-ups, positioning Austin as an emerging hub for this sector. The project is accompanied by avid support from the Austin Chamber of Commerce and its Opportunity Austin initiative, hailing the local life science sector as an emerging powerhouse.

Why this matters: The development of new commercial life science space leverages opportunities for commercial realtors in Central Texas to service an emerging cluster of businesses and start-ups dedicated to scientific innovation.  

Byron Nelson Tournament Replaces AT&T Sponsorship with South Korea-based CJ Group

Source: DMagazine.com

Summary: The Byron Nelson tournament has found its new sponsor, the CJ Group, after AT&T- Dallas based company voided its sponsorship deals. The event will be now known as The CJ Cup Byron Nelson and will be held at TPC Craig Ranch in McKinney. The tournament has been hosted by the Salesmanship Club of Dallas since 1968 and generates considerable funds for charities, with the 2022 tournament producing an economic impact of $55.4 million in North Texas. Lastly, Realty Capital breaks the ground on 58 homes under the $2.2 billion Lakeside development, capturing the radar of commercial real estate professionals operating in Central Texas.

Why this matters: The CJ Group sponsoring the Byron Nelson tournament, concentrating considerable money and attention in Central Texas, could be a significant investment demand accelerator, resulting in an inflow of global investments, expanding possibilities for commercial landholds, especially in areas close to TPC Craig Ranch in McKinney, profiting practicing professionals like you aiming to present more mixed-use development options to your clientele.

ECONOMIC & SOCIAL COMPARISONS

Would you rather be Salt Lake City or Austin, Texas? Here’s a little data comparing the two

Source: sltrib.com

Summary: Salt Lake City, often likened to Austin in terms of its recent blossoming cultural vibrancy, still lags behind Austin in terms of population, demographic diversity, incomes, and percentage of individuals with a bachelor's degree or higher. Data indicated increased out-migration from Salt Lake City, contrasting with a steadier influx to Austin. In economics, while housing and commute times deem Salt Lake City more affordable and convenient, Austin yields higher salaries and lower poverty rates. Interesting cultural parallels and contrasts were also drawn between the cities - both held commendable presence of the LGBTQ community, while Salt Lake City took the crown for more breweries per capita.

Why this matters: The data-driven comparison between Salt Lake City and Austin could assist commercial real estate professionals in understanding Austin's stronger areas, allowing them to comprehensively market these aspects to potential clients looking for favorable socio-economic conditions within robust and diverse cultural contexts.

TODAYS PERMIT RUNDOWN

We're thrilled to highlight some fascinating permitting activities shaking up the construction and commercial real estate landscape in Central Texas!

First up, get ready for not one, but two posh powder rooms coming your way. The "Barton Creek Plaza III" and "Barton Creek Plaza II" are both getting a sleek makeover of their second-floor restrooms, thanks to the expertise of S. Tipton Studio and Vanderbilt Office Properties. Facing the Capital of Texas Highway in Austin, these projects tied at an estimated cost of $131,000, have us all waiting for the big reveal.

Over at "Chu Optical", a new vision for an up-to-date, renovated retail space is in the works. Gensler is the mastermind behind the design, while Chu Optical is footing the $700,000 bill for this eye-catching metamorphosis on Aldrich Street.

Get those yoga mats ready, because a burst of health is coming to Bee Cave! "Vitality Bowls Superfood Cafe" has its renovation straws in place, ready to blend up an estimated $250,000 alteration. This tenant improvement project led by Superfood Cafe, LLC and designed by Eric Shephard Architects promises to deliver a mix of acai bowls, smoothies, fresh juices, and hearty sandwiches.

Meanwhile, "Intex Flooring" is laying the groundwork for a new construction project that will shell out an estimated $2,418,000. This single-story, cold, dark shell building, backed by Flatrock Companies and designed by Powers Brown Architecture, promises future tenant improvements that are sure to be a game-changer.

Finally, don't miss the buzz around the "Travis Club Sale Office". Property owners, Bee Creek Stables, L.P are jumping onto the new construction bandwagon, with a tenant improvement finish-out of an existing shell office space. Led by the expertise of Lee A. Ray, Architect, this estimated $197,500 project sits pretty on Bee Creek Road, destined to make quite a statement.

Stay tuned for more updates as these projects take shape, promising to redefine the construction and commercial real estate scenes in Central Texas.