Daily Briefing: 🌆 EQT Exeter's Big Play & A Renaissance Rebirth in Austin 🔄

Welcome, Construct Intel Austin!

As we kick off another week with our fingers on the pulse of the construction and commercial real estate world, we've got some groundbreaking news to share in our Monday morning brief.

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

1. EQT Exeter to triple Austin footprint, eyeing aggressive expansion. 🌆

2. $64M Camber Ranch opens, adding 483 homes to Austin's skyline. 🏡

3. Austin's Sheraton morphs into Renaissance, signaling major hotel makeover. 🏨

4. Non-profit champions affordable housing, seeks millions for the "missing middle." 💼

Commercial Real Estate and Investments

Global real estate giant EQT Exeter looks to triple its Austin-area holdings

Source: Austin Business Journal

Summary: EQT Exeter, a global real estate firm based in Philadelphia, is looking to expand its industrial footprint in the Austin area, with current holdings totaling 2.5 million square feet spanning Georgetown, Buda, and Lockhart. The company has actively been purchasing land and buildings and securing large tenants, signaling their intention to "aggressively look at opportunities" for growth in the region.

Why this matters: This expansion by EQT Exeter signifies an increased interest in the Austin-area market by large-scale commercial real estate investors, indicating a promising trend for local commercial real estate professionals looking to partner with such investors or advise their clients on market trends and potential opportunities.

Taurus Investment-Led Venture Breaks Ground on Austin, Texas, Apartments

Source: Commercial Real Estate Direct

Summary: AOG Living and Taurus Investment Holdings have initiated construction on Evergreen at Whisper Valley, a 348-unit apartment property in Austin, Texas. The property, which will include a mix of one-, two-, and three-bedroom units, is part of the 2,670-acre master-planned development of Whisper Valley.

Why this matters: The new construction project signals growing investment opportunity and market demand in the Austin area, providing commercial real estate professionals with a potential prospect for their clients interested in elevated residential spaces. 

In Austin, a 367-room Sheraton to Rebrand as a Renaissance

Source: MeetingsNet

Summary: The Sheraton at the Capitol in Austin is undergoing a major transformation to become Downright Austin, a Renaissance Hotel by spring 2024. The property, five blocks from the Texas State Capitol, boasts 367 guest rooms, a 31,000 square feet of indoor and outdoor event spaces, and a 9,600-square-foot ballroom. A unique dining experience is being created in a sunken dining room with pool views, and a new lobby walk-up counter for morning coffee. The hotel is conveniently located less than a mile from the Austin Convention Center and about seven miles from the Austin Bergstrom International Airport.

Why this matters: The rebranding of a prominent hotel in Central Texas, especially one with significant event space, presents commercial real estate professionals with an opportunity to advise clients in the hospitality industry about the potential impacts on local competition and property values.

Muskin | Elam Arranges Sale of 30-Unit Apartment Complex Near Downtown Austin

Source: REBusinessOnline

Summary: Muskin | Elam Group, a local brokerage firm, has brokered the sale of a 30-unit apartment complex, Mint House at The Hatchery, near downtown Austin. The property was sold by an undisclosed seller, who used it as a short-term rental facility, to Resolute Capital. The sale was financed by Vista Bank.

Why this matters: This transaction underlines the ongoing attractiveness of central Austin for commercial real estate investment, particularly in the residential rental sector, which can be an important data point for professionals advising clients on potential investment opportunities.

Austin office market has a glut of space, but experts predict it will eventually fill up

Source: Austin American-Statesman

Summary: Austin's office market currently has a high vacancy rate of 27%, significantly up from 21.8% at the end of 2022. Despite this, experts predict the market will eventually stabilize, with tech sector leading the market in leasing activity. Notable examples of vacant spaces include a 35-story building leased by Google and over 600,000 square feet of space that Facebook is looking to sublease. The increasing trend of remote work may shift more real estate demand towards suburban areas. Nevertheless, three of the largest lease transactions last quarter were signed by tech companies, implying a positive outlook for the commercial real estate market. Property values are declining, resulting in landlords planning to protest their property tax valuations. 

Why this matters: This information signifies an opportunity for commercial real estate professionals in Central Texas to strategically advise their clients on the potential of subleases, as well as the shifting trends towards suburban locations.

Groups sue Austin officials over plan to redevelop dairy plant site

Source: KUT News

Summary: The city of Austin is facing a lawsuit from advocacy groups over its approval of a redevelopment plan for a 21-acre dairy plant site on the Colorado River. The plan, put forth by Endeavor Real Estate, proposes 1,400 apartments, a 220-room hotel, and hundreds of thousands of square feet of commercial space contrary to the city's existing zoning regulations for industrial use. The lawsuit argues that the approval process was unusual and that city officials granted special treatment to the owners of the dairy plant.

Why this matters: Understanding the legal challenges and potential hurdles to large-scale development projects like this can help real estate professionals better anticipate and navigate potential obstacles in their own commercial ventures. Staying informed on the city's shifting regulatory environment can also provide valuable context for client advisories on the viability of similar projects.

Affordable Housing and Community Development

Austin non-profit raising millions to develop affordable housing

Source: Yahoo News

Summary: Austin-based non-profit, Affordable Central Texas, is currently raising millions of dollars to develop affordable housing within the city. The initiative, supported by a significant investment from PNC Bank, aims to purchase and maintain multifamily properties for moderate and middle-income individuals, specifically targeting the "missing middle". The program's purpose is to ensure affordability for essential workers such as teachers, first responders, and maintenance professionals, with rents that align with median family income increases rather than market rates. Affordable Central Texas currently holds 14 properties totaling 2,150 units.

Why this matters: This move towards affordable housing in Austin could create opportunities for commercial real estate professionals to find new investment avenues, and assist clients interested in multifamily properties or aligned with social impact investment.

YIMBYTown comes to Austin

Source: The Real Deal

Summary: The YIMBYTown conference brought together 500 urbanists, developers, and housing advocates in Austin, aiming to find ways to encourage more housing development. Austin's city council and mayor have made significant changes to the city's development code, the most notable being the reduction in minimum lot sizes, the elimination of parking minimums, and allowing three homes on any single-family lot in the city. Despite Austin's rapid expansion and lack of a major rail system, it has become a focal point in the national housing debate. The city, despite a drop in rents and housing prices, is still above pre-pandemic averages, raising concerns about affordability for young and unestablished individuals.

Why this matters: Understanding the policy changes and the progressive stance Austin is taking towards housing development can equip commercial real estate professionals to better advise their clients on investment opportunities and navigate the changing landscape.

Technology and Innovation

New technology center coming to Austin

Source: Newstalk Texas

Summary: A new technology center, the Hayes Innovation Center for Advanced Manufacturing, is in development in Austin, offering a 50,000-sf space for access to high-tech manufacturing machines, coworking spaces for robotics startups, and educational certificate programs. Located on roughly eight acres at 6201 Quinn Luke Trail, the $20 million project will operate as a nonprofit and is backed by the SH130 Municipal Management District. The center, designed by New York-based Danze & Blood Architects, will be revealed in late March and is anticipated to open to tenants in the fall.

Why this matters: This development represents a significant addition of commercial space in Austin, offering unique opportunities for commercial real estate professionals to engage with prospective tenants interested in high-tech manufacturing, robotics startups, and career-building educational programs.

YIMBYTown comes to Austin