Daily Briefing: 🌆 Economic Surge Meets Urban Change in Austin! 💼

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

1. Catellus to transform 208 acres into a vibrant East Austin community. 🌆

2. Austin's booming economy: 12.2% business-cycle growth, low unemployment. 💼

3. Parking mandates scrapped, Austin reimagines urban development. 🚗

4. Relocate don't demolish: Austin champions historic preservation. 🏚️

Economic Development and Real Estate

Catellus aims to develop up to 3K housing units in east Austin

Source: Real Estate Center at Texas A&M University

Summary: Catellus Development Corp. is planning the Colony Park development project to transform 208 acres of city-owned land in east Austin into a residential community. The project plans 2,000 to 3,000 new housing units, over 41 acres of parks and open spaces, and 230,000 sf of commercial space, including 125,000 sf of retail space. The development will also create approximately 2,900 construction and 1,200 permanent jobs, with 20% of its units being income-restricted. The total estimated cost of $257 million is expected to generate $780 million in taxes on completion, financed by land sale revenue, TIF, the Capital Improvement Program, and a potential $5 million from an affordable housing bond package.

Why this matters: This project's magnitude and scope provide a significant opportunity for commercial real estate professionals in Austin, with substantial commercial square footage slated for development and a considerable demand for supporting services driven by the influx of residents.

Austin Economic Indicators

Source: Austin Economic Indicators

Summary: Austin's economic performance in September 2023 showed significant expansion in the employment sector, a decrease in the unemployment rate, and slower wage growth. The Austin Business-Cycle Index, a measure of economic activity, grew an annualized 12.2 percent, slower than August's 3.8 percent gain. The unemployment rate in Austin dipped to 3.4 percent, remaining below the state and national rates. Significant growth was seen in the sectors of leisure and hospitality, trade, transportation, utilities, and professional business services. Contrarily, office vacancies increased, both in suburban and downtown areas, with suburban office vacancies showing a steady increase since 2021. Home prices declined year over year, but recent increases were observed.

Why this matters: The rising office vacancies, despite the economic and employment growth, indicate a continued shift in demand that commercial real estate professionals could leverage by diversifying their portfolio or advising clients to consider flexible office spaces.

Policy and Infrastructure

Austin City Council votes to eliminate parking mandates from land development code

Source: Reddit /r/Austin

Summary: The Austin City Council has voted to eliminate parking mandates from the city's land development code, a move that could significantly alter the landscape of future developments. This decision marks a shift from previous regulations that required a certain amount of parking spaces per unit, potentially freeing up space for developers and influencing the design and utility of new establishments.

Why this matters: This shift in city policy provides commercial real estate professionals an opportunity to innovate and optimize space utilization in their future developments, potentially yielding higher returns for clients and increasing their competitiveness in Austin's dynamic real estate market.

Housing and Urban Planning

Choosing to relocate an old house rather than demolishing just got easier in Austin

Source: KXAN

Summary: The Austin City Council has approved a resolution to facilitate the relocation of houses as an alternative to demolition, with the aim of promoting historical preservation, sustainability, and affordability. The measure seeks to raise awareness about relocation, streamline the process, and develop a market for resale of relocated homes. Concerns about increased density and the potential loss of older, smaller homes have been cited as motivating factors, along with the need to address the city's affordability and environmental crises.

Why this matters: As demolition of small homes to make way for larger developments is a common trend, this resolution offers commercial real estate professionals an alternative strategy to preserve character and affordability in Austin's evolving real estate landscape, potentially creating new opportunities and markets for them and their clients.