Daily Briefing: 🌆 Skyline Shifts & Mayoral Rifts: Austin's Future Hanging in the Balance 🏛

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 Friday morning brief.

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

1. Austin's mayoral race heats up with Tovo and Pulido challenging Watson. 🏛

2. Gensler's "trapezoidal" skyscraper set to redefine Austin's skyline by Summer 2024. 🌆

3. Zoning revamp for Austin's light rail line promises denser, greener futures. 🚈

4. $1.5M pedestrian bridge to bridge gaps in Cedar Park's connectivity. 🌉

Austin's Real Estate Development and Market Trends

Patrinely, Realterm Break Ground on 439,000 SF Spec Industrial Project in South Austin

Source: REBusinessOnline

Summary: Houston-based Patrinely and Annapolis-based Realterm have commenced construction on a sizable speculative industrial project in South Austin. The project, known as Airfield 130, spans 439,000 square feet, comprising four buildings on a 34.5-acre site. Each structure will have 32-foot clear heights and 190-foot truck court depths, with the project offering 129 dock-high doors in total. The construction is scheduled for completion in early 2025, with KBC Advisors handling the leasing.

Why this matters: This substantial industrial project signifies a growing demand for industrial space in South Austin, indicating a strong market for commercial real estate professionals to capitalize on, either through direct involvement or advising clients in the industrial sector.

"Trapezoidal" skyscraper by Gensler nears completion in Austin

Source: Dezeen

Summary: The construction of a "trapezoidal" skyscraper in downtown Austin, designed by US studio Gensler, is nearing completion. The 845-foot-tall skyscraper, known as Sixth and Guadalupe, is a mixed-use development featuring residential, office, and retail spaces. The design structure comprises three stacked volumes that decrease in width as it rises, encapsulating two glazed volumes and an opaque podium. The project, which is shaped by the Texas Capitol View Corridors legislation, is expected to be completed in Summer 2024.

Why this matters: Knowledge of this ambitious project is critical for commercial real estate professionals in Central Texas because it exemplifies the type of innovative, mixed-use development that is reshaping Austin's skyline and could influence client interests and market trends.

Austin among metros in the US with steepest rent declines

Source: KXAN

Summary: Austin has experienced some of the largest declines in rental rates in the US; data from Rent.com's December market report reveals a 12.5% decrease from last year's median rent, with similar findings from RealPage Inc. The fall in rents is largely due to an increase in the supply of housing, causing less competition in the market.

Why this matters: The decline in rental rates signifies a shift in the Austin rental market, providing commercial real estate professionals with an opportunity to inform clients of the changing market dynamics and possibly negotiate better deals for their business clients seeking rentals in the area.

Austin Economic Indicators

Source: Dallas Federal Reserve

Summary: The Austin economy experienced job losses in the tech sector in December 2023, leading to a rise in unemployment. Despite this, rent prices stabilized and home inventory increased. Austin's Business-Cycle Index grew by an annualized 0.7%, albeit slower than the previous month. The sectors with the most job growth were leisure and hospitality, education, and health services, while the professional and business services sector, as well as construction and mining, saw a decline. Despite these losses, Austin's payroll expanded by 3.1% in 2023, outpacing the nation's growth.

Why this matters: The stabilizing rent prices and increased home inventory are vital indicators for commercial real estate professionals to understand the supply and demand dynamics in Austin's real estate market, informing strategic decisions around property investment and leasing.

How Austin’s Mayoral Race Is Shaping Up So Far

Source: Austin Chronicle

Summary: Austin's mayoral race has gained two more candidates: Kathie Tovo and Carmen Llanes Pulido, who contrast with incumbent Mayor Kirk Watson. Tovo, a former City Council member known for her cautious approach to housing policy, and Pulido, an advocate for affordable housing, intend to challenge Watson on his market-based solutions to the city's housing affordability problem. Pulido's day job as executive director of Go Austin/Vamos Austin, a nonprofit fighting to preserve older, affordable housing, will be a key difference between herself and Tovo. Both candidates are critical of the way Watson has run the city government and emphasize the need for more transparency and collaboration.  

Why this matters: Understanding the proposed housing policies of potential mayoral candidates will provide commercial real estate professionals with an idea of the possible future direction for Austin, which can guide them in making strategic property investment decisions for their clients.

Policy and Infrastructure Development Impacting Real Estate

Austin initiates process to add density, minimize parking near future light rail line

Source: KXAN News

Summary: The Austin City Council has initiated an amendments process to create a new zoning district near the future Project Connect light rail line, allowing for increased density and minimized parking. The aim of these amendments is to encourage the development of affordable housing and mixed-use properties along the transit line. Potential changes include a density bonus program, modifications to downtown parking regulations, and an ETOD overlay along Phase 1 of the light rail route. The hope is that these amendments will attract more federal funding for the light rail project.

Why this matters: Understanding these proposed zoning changes and their potential impact on property values in this area can help real estate professionals strategically advise their clients on both current and future commercial investments.

Pedestrian bridge over S. Bell Blvd. gets go-ahead for design

Source: Newstalk Texas

Summary: The Cedar Park City Council has approved a $1.5 million contract to design and construct a pedestrian bridge over S. Bell Blvd., connecting Lakeline Park to Williamson County Regional Trail. The project, now heading into its design phase, includes a new pedestrian bridge and trail extensions to connect park systems on either side of S. Bell Blvd., with an estimated construction period of 18 months after the design phase.

Why this matters: This development can enhance the appeal of properties in the vicinity, as it improves pedestrian connectivity and access to recreational facilities, potentially leading to an increase in property value in the Cedar Park area.

Strategic Real Estate Investments and Market Insights

Austin’s Weitzman names director of brokerage

Source: Rejournals.com

Summary: Nick Naumann has been promoted to director of brokerage at Weitzman, a retail-focused brokerage firm in Austin, Texas. In his new role, Naumann will oversee the Austin office’s brokerage team and manage leasing duties for retail properties totaling more than 10 million square feet. Naumann will continue to handle general retail brokerage, including retail project leasing, retail tenant representation, and investment sales in the Austin area. He has represented several notable clients and is a site selection and market expansions specialist for various businesses.

Why this matters: The promotion of Nick Naumann at Weitzman underlines the importance of established relationships and vast client networks in the evolving Austin retail real estate market, demonstrating the value of experience and connections when it comes to successful commercial real estate transactions.