August 24th, 2023 News Brief TLDR:

• Keppel Pacific Oak's migration strategy targets booming Austin, Texas real estate. 🏙️

• Extreme Texas heat ups the ante for construction worker safety measures. ☀️

• Wilson Tower: Austin's new high-rise offering 350 residential units by 2026. 🏢

• Indeed Tower shakeup: Subleasing impacts Austin's already-vacant downtown office spaces. 💼

REAL ESTATE & INVESTMENT

Singapore’s Keppel Pacific Oak US REIT looks to outmigration for higher occupancies in portfolio

Source: TheEdgeMalaysia.com

Summary: Keppel Pacific Oak US REIT (KORE) in Singapore is employing an innovative strategy of drawing the migration flow from major US cities to smaller, second-tier cities where their assets are located, including Austin, Texas. Tech companies are particularly drawn to KORE's low-rise buildings and business campuses for usability and operation needs. Economic data of the cities with KORE assets indicates an upswing, making it a preferred choice for both domestic and foreign investors. Refurbishments and enhancements add appeal to the existing property portfolio and help yield higher occupancy rates despite some challenges related to the comparatively unfamiliar markets among Asian investors.

Why this matters: The strategy employed by KORE, a major player in the real estate investment sector, points to the growing attractiveness and potential growth opportunities within second-tier cities in the US, such as Austin. Knowledge of the interests of massive international firms like KORE and Bain Capital's Regional Logistics Management strengthens a real estate professional's understanding of the broader market dynamics, offering key leverage points when discussing investment decisions and advising clients eyeing the Austin property market.

Construction set to start on new high-rise, Wilson tower, in Austin

Source: ConstructionReviewOnline.com

Summary: Construction on the new high-rise Wilson Tower in Austin is scheduled to start later in the year. This project, despite undergoing considerable design changes, will introduce 350 novel residential units into the city's real estate market. Ground-floor retail space stands as another distinguishing feature of the project. The demolition of the existing building, the former Avenue Lofts, begins the launch, and completion set for August 2026.

Why this matters: Knowledge of upcoming developments such as Wilson Tower will help Central Texas commercial real estate professionals anticipate prospects in both apartment leasing and retail business premises, driving strategic portfolio planning for their clients.

REIT Income For Life

Source: SeekingAlpha.com

Summary: This article highlights an in-depth purpose of Real Estate Investment Trusts (REITS), focusing on companies like Realty Income, Mid-America Apartment Communities, Agree Realty, and VICI Properties which all present excellent income potential, underpinned by solid fundamentals. With annual total return forecasts ranging from 20% to 25% for these vetted organizations, it underscores the fact that REITS offer a combination of consistent dividends alongside potential for capital appreciation. Particular shine is given to Realty Income and Mid-America Apartment Communities for their outstanding track records, diversified portfolio, and dependable dividend yields.

Why this matters: This article highlights an in-depth purpose of Real Estate Investment Trusts (REITS), focusing on companies like Realty Income, Mid-America Apartment Communities, Agree Realty, and VICI Properties which all present excellent income potential, underpinned by solid fundamentals. With annual total return forecasts ranging from 20% to 25% for these vetted organizations, it underscores the fact that REITS offer a combination of consistent dividends alongside potential for capital appreciation. Particular shine is given to Realty Income and Mid-America Apartment Communities for their outstanding track records, diversified portfolio, and dependable dividend yields. For a commercial real estate practitioner based in Central Texas, this article emphasizes the significance of advising their clients to consider investing in Real Estate Investment Trusts, particularly in ones such as Mid-America for its high-performing assets in Austin, as a form of building diversified real estate portfolios contributing healthy levels of reoccurring income in their overall wealth map.

New workforce housing coming to downtown Austin The William P. Hobby, Jr.

Source: Kxan.com

Summary: State Office Building in downtown Austin, situated at 333 Guadalupe St, is set for redevelopment, styled as a mixed-use development that comprises an assortment of amenities such as workforce housing, child care facilities, retail space, and ample parking. Furthermore, it's strategically located alongside the proposed route for the Project Connect light rail, thus presenting easy accessibility. With a bidding window of 90 days for prospective investors, the Texas General Land Office will then recommend the best proposals to the Texas School Land Board, taking the lead on the final call.

Why this matters: Professionals operating in Central Texas's commercial real estate would do well to absorb the growth trajectory signified by this development, showcasing a vibrant synchronization of residential and commercial functionalities with potential to spur economic dynamism and potentially drive client confidence in the market.

Local Developer Wants to Bring 2,100 Apartment Units to Austin, Texas

Source: CreNews.com

Summary: Austin-based real estate investment firm, Wildhorn Capital, is proposing significant property development launching a rezoning request which envisions the rise of approximately 2,100 rental flats at select locations Elevation limit adjustments from 40 feet to 120 feet forms part of this forthcoming plan.

Why this matters: Professionals practicing commercial real estate in Central Texas can employ this information to track shifting dynamics in the property market, consequently enhancing investment advice accuracy rendered to clients bearing further investment ambitions in the area's residential sector.

People in Real Estate

Source: Recenter.Tamu.edu

Summary: The article provides key updates about personnel changes in various high-profile companies within the Real Estate industry. In Houston, Robert LaCoure has taken a position as Senior Director at Cushman & Wakefield, Kelly Baldwin is now director of operations at the Real Estate investment company, Pagewood, Jim Humphries has secured the position of Director at JLL Capital. In Central Texas, Colliers has scored Patrick Hill as a Senior Vice President, focusing on tenant and buyer/seller representation in the office sector.

Why this matters: This information is useful to professionals because the influx of highly-qualified individuals like Patrick Hill into Central Texas reflects the region's growing competitiveness and attractiveness which influences the office sector value in which they operate.

CONSTRUCTION & WORKER SAFETY

‘We’re Praying’: Extreme Texas Heat Brings Construction Worker Safety To The Fore

Source: Bisnow.com

Summary: The extreme summer heat that lashed Texas, raising temperatures within the four largest metropolitan areas - including Austin, to above 100°F for a lengthy period has drawn attention to construction worker safety. Adapting to unfavorable weather, construction and commercial property management professionals are emphasizing worker safety and carrying out proactive maintenance offseason. Under these extreme conditions, construction schedules have been revised with early start times, and on-site safety measures like shaded workspaces increased. Furthermore, the workday duration has been reduced, and a law that will soon take effect under these extremes will eliminate mandatory water break protocol for construction workers, but industry professionals don't foresee this impacting on-site safety measures. Although heat is deterring, it doesn’t halt the construction activities which are necessary to meet the indispensable housing inventory needs.

Why this matters: This constant adaptability and commitment seen in the construction sector, despite exaggerated environmental challenges, mirrors the resilience of Commercial real estate in Austin, showing clients that although factors such as weather affect the timeline, they don't deter progress or undermine safety.

URBAN DEVELOPMENT & SOCIAL ISSUES

Job-search site Indeed has made the move to its new downtown Austin headquarters

Source: Stateman.com

Summary: Indeed, one of Austin's prominent technology employers has consolidated its employees in the newly-occupied Indeed Tower, contributing not only to downtown Austin's office space dynamics, but it's also affecting trends in subleasing, as the company plans to sublease space at Domain Gateway. Meanwhile, the city’s downtown office market struggles with record high vacancy rates, expected to near 26% by next year due to a boost in remote/hybrid working setups and tech companies mitigating office footprints. According to commercial real estate data firm, CoStar Group, companies looking to sublease has drastically increased this past year, with nearly one million square feet of space now available, marking a significant shift in commercial real estate patterns.

Why this matters: Understanding and harnessing the information about prevalent trends and shifts in commercial workspace demand, as depicted in tangible cases such as initiated by tech giant Indeed, leaves room for innovative brokerage opportunities, facilitates sound decision-making when guiding clients, and allows proactive negotiation processes.  

Austin transit experts detail changes to come in land use, urban density

Source: Kxan.com

Summary: Future transit, land usage, and housing density decisions in Austin were the main topic of discussion in a recent Urban Land Institute panel hosted by representatives from the City of Austin, CapMetro, and the Austin Transit Partnership. The focal point of the conversation was the city’s “modal shift” goals for 2039, aiming to have only half the city reliant on single-occupancy vehicles. Significant emphasis was put on new mobility forms playing a role in Austin’s economic and population growth. The panel also mentioned the implication of Project Connect's Phase

Why this matters: 1 light rail plan and adjusted policies that promote dense living and usage of various transit methods. The movement towards multi-modal transport in Austin and the subsequent changes in urban planning and land usage provide commercial real estate professionals a robust understanding of future prospects in community-focused development and dense urban living locations, aligning their strategies to capitalize on potential growth areas.

TODAYS PERMIT RUNDOWN

Buckle your construction helmet, Central Texas! Let's jump right into the latest permits of importance in our industry! Kick starting all the way from 11800 Menchaca Rd, we’ve got a hefty New Construction project in the chamber. Spearheaded by the ever-vibrant Rangewater, LLC, this project is an indicator of the booming residential market—with a titanic serving of 240 multifamily units distributed among 3 buildings and a clubhouse with studs-up amenities nestled inside building #1.

Architecture Demarest, handpicked for the job, are up for quite a ride. Estimated at a thundering $38,700,000.00, expect building permits, occupancy permits, plumbing, electrical, fire safety and land development permits to get this party rocking. Don't be surprised if you feel the tremors in your local planning department! Swing over to Austin Infiniti Service Shop now, which is popping the hood for a Renovation/Alteration.

Continental Imports, Inc. along with LOMA Architecture are pumping $1,000,000.00 into the project for an oven-fresh, new interior and whipping up some HVAC conditioning. We're talking HVAC and building permits, possibly including electrical and plumbing for all the under-the-bonnet tinkering they'll be doing. Add to that a signage permit likely dialed in, and Austin Infiniti is setting the stage for a tasteful remodel. Keep your eyes on the rear-view mirror for this one! That's it folks! Quite the permit parade happening in Central Texas. Until the next riveting update, keep those cement mixers rolling!

investment decisions and advising clients eyeing the Austin property market.