Daily Briefing: 🚀 Killeen's Wealth Boom & Austin's Skyline Glow-Up: Invest Wisely! 💼

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 Wednesday morning brief.

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

1. Killeen's high earners skyrocket 146.2%, igniting upscale real estate demand. 🚀

2. Austin's skyline transformation: Zoning wins enable towering developments. 🌆

3. Round Rock's $19.5M revamp begins, Palm House moves for progress. 🏗️

4. Fredericksburg's luxury vineyard homes blend opulence with viticulture. 🍇

Real Estate Growth and Development Opportunities

Surprising Central Texas city has more than doubled its rate of big earners

Source: CultureMap Austin

Summary: Killeen, a Central Texas city, has seen a significant 146.2 percent growth in high-income households since 2021, positioning it as the city with the fourth-highest growth in this demographic in the U.S. This growth is not limited to high earners, as another study by SmartAsset also found Killeen to have the best housing market for first-time homebuyers in 2022. Round Rock, another Central Texas location, ranked 55th in the nation with a 51.1 percent growth in high-income households, while Austin ranked 172nd, with a 19.2 percent increase.

Why this matters: The rapid growth of high-income households in Killeen and Round Rock indicates a significant potential for commercial real estate professionals to capitalize on an increase in demand for upscale residential and commercial properties in these areas.

Planning phase begins for development near Austin Convention Center

Source: KXAN.com

Summary: The city of Austin is in the initial planning phase for a potentially extensive development project near the Austin Convention Center. Potential developments may include hotels, multi-family housing projects, and ground-floor retail. The city is currently conducting market analysis, with construction projected to start in 2026. The project is the next phase of the Austin Convention Center's expansion, which the city decided to move forward with in May 2023. The Convention Center is scheduled to close for construction after South by Southwest in 2025 and reopen before South by Southwest in 2029.

Why this matters: For commercial real estate professionals, this potential development represents a significant investment opportunity in the Austin area, particularly in hospitality, residential, and retail sectors. Professionals can use this information for strategic planning and business development, advising clients on potential investment opportunities, and positioning themselves at the forefront of major city developments.

Palm House moved to original site, changes for downtown Round Rock begin

Source: KXAN News

Summary: The city of Round Rock, Texas, is undergoing a $19.5 million project to renovate the Griffith building and add a walkway from Liberty avenue to Main street. This development requires the relocation of the historic Palm House, which has housed the Chamber of Commerce. The project is being funded by sales tax revenue and the city's general self-finance construction fund.

Why this matters: This development in downtown Round Rock signifies potential commercial real estate opportunities for agents specialized in retail and office spaces, as the renovation of the Griffith building and the construction of the new paseo may attract new businesses to the area.

Marcus & Millichap Brokers Sale of Self-Storage Development Site in South Austin

Source: REBusinessOnline

Summary: Marcus & Millichap managed the sale of a 3.5-acre self-storage development site in South Austin, just 6.5 miles away from downtown, with a potential to develop a facility offering up to 73,263 net rentable square feet across 786 units. The seller and buyer, both undisclosed, were assisted in the transaction by Brian Kelly, Brett Hatcher, Gabriel Coe, Nathan Coe, and Tim Speck from Marcus & Millichap.

Why this matters: The sale of this significant development site in South Austin underscores the ongoing demand for self-storage facilities in the area, signaling potential growth opportunities for commercial real estate professionals focused on this sector in Central Texas.

Innovative and Unique Real Estate Projects

Check out these unique views of Austin's changing skyline

Source: Austin American-Statesman

Summary: The article provides a unique perspective on the dramatic transformation of Austin's skyline over the past two decades. The shift, captured by David Armbrust, a prominent Austin real estate attorney, is largely due to zoning changes won by his firm, Armbrust & Brown. The firm's influence, extending beyond downtown Austin to the entire Central Texas region, has allowed clients to construct taller and grander towers. Armbrust believes the skyline's drastic change represents Austin's economic health, vitality, and resilience, with growth expected to continue into 2024. 

Why this matters: This article underlines the significant role zoning changes have played in shaping Austin's skyline, a crucial understanding for commercial real estate professionals in Central Texas as it allows them to anticipate future development trends and offer informed advice to clients about potential investment opportunities.

Luxury neighborhood to be developed on vineyard in Fredericksburg

Source: Newstalk Texas

Summary: CB Wine Tourism Developments, a Mexican firm, is planning to construct a 220-acre project in Fredericksburg, between Fredericksburg and Johnson City. The development, called Puerta Del Lobo, is aimed at wine enthusiasts and will feature 90 luxury homes on 1.5-acre lots, each with its own vineyard. Prices for the lots are currently around $650,000, but are expected to rise to $1.1 million as the project progresses.

Why this matters: The information provides an opportunity for commercial real estate professionals in Central Texas to capitalize on the rising interest in luxury lifestyle properties, and to offer unique value to potential clients interested in vineyard ownership without the hassle of managing large acres of land.   

Housing and Community Development Initiatives

City of Austin Making Significant Progress in Building Pathways to Exit Homelessness

Source: City of Austin News

Summary: The City of Austin's Homeless Strategy Office and Housing Department are making significant progress in expanding emergency shelter capacity and moving forward with new permanent supportive housing projects. In 2023, the city saw a record 3,324 clients use shelter services, leading the nation in the percentage of clients successfully exiting shelters. While only 3% have transitioned to permanent supportive housing, the city expects this number to increase with the planned addition of over 1,000 new units by 2026, a 630% growth. Future steps include further exploration of shelter opportunities, releasing solicitation for landlord incentives, and fostering new partnerships for Permanent Supportive Housing developments.

Why this matters: The city's significant expansion in permanent supportive housing projects presents a potential investment opportunity for commercial real estate professionals in Central Texas, while the forthcoming solicitation for landlord incentives may open doors for mutually beneficial collaborations between the city and commercial real estate stakeholders.

JCI's new multifamily project in Manor to be funded by KeyBank

Source: Newstalk Texas (via Real Estate Center at Texas A&M University)

Summary: JCI Residential is initiating a 325-unit mixed-income development, Cantarra Apartments, with construction set to begin soon. The project, located in Manor, is funded by KeyBank, which has provided a $41.6 million construction loan and a $46.2 million forward commitment for permanent financing once the property stabilizes.

Why this matters: This project's commencement underscores the continued growth and investment in the multifamily sector in the Central Texas region, positioning commercial real estate professionals to leverage this trend when advising clients on investment opportunities.