August 30th, 2023 News Brief TLDR:

1. Legal challenge against Austin's Affordability Unlocked may rewrite development rules. ⚖️

2. South Central Waterfront's new regs to reshape Austin's skyline soon. 🏗️

3. Wilson Tower's fall start: 45 stories, 350 units, a cityscape game-changer. 🏢

4. Avenue Lofts bow out, paving way for 44-story apartment upheaval. 🚧

REAL ESTATE DEVELOPMENT & REGULATORY CHANGES

City facing new legal challenge over Affordability Unlocked, other rules this week

Source: AustinMonitor.com

Summary: The Austin city is in a legal challenge initiated by a group of 18 plaintiffs against four Austin city regulations including the Affordability Unlocked ordinance. The group argues these ordinances were passed without public notice, violating city processes for informing neighbors of any nearby property development changes. If the court sides with the plaintiffs, Austin's city council would need to reconsider these ordinances after issuing a wider public notice. This development could impact local measures at stimulating affordable housing construction, as developers and land trusts have been utilizing regulations like the "Affordability Unlocked" one to add more dwelling units and develop projects for low-income residents.

Why this matters: Commercial Real Estate professionals working in Austin need to stay abreast of these local government issues in order to more confidently work within the legalities of the zone development and advise their clients effectively about potential challenges on the horizon.

Regulating plan for Austin’s South Central Waterfront could be adopted this year

Source: AustinMonitor.com

Summary: Austin is gearing up to introduce its long-awaited South Central Waterfront District Regulating Plan, targeted to lead development patterns around the Ann W. Richards Congress Avenue Bridge. Updated strategies would determine new benchmarks for local development, captured by factors such as building heights, densities, and utility. Large-scale planned unit development (PUD) projects are already underway, including major ones on Riverside Drive and South Congress Avenue. The planning board sees the city's current lack of control over future project aspects as a missed chance to maximize community benefits from oncoming developments.

Why this matters: By understanding the imminent changes these regulations could bring, Central Texas commercial real estate professionals can pitch in innovative strategic inputs to clients investing around South Congress and Riverside, helping them secure rewarding projects while abiding by these new regulatory standards.

Wilson Tower construction to start this fall

Source: Recenter.tamu.edu

Summary: Austin is readying for yet another architectural masterpiece— the Wilson Tower. Construction, set to commence this fall, will revolutionize the city's skyline. What was initially planned as an 80-story mammoth will stand as a 45-story, 350-unit complex, providing retail space and parking facilities across multiple floors along with strategically planned residential spaces. Construction overseen by Wilson Capital LP at 410 E. Fifth St. is due to complete by fall 2026.

Why this matters: The information on Wilson Tower's development serves testament to Austin's flourishing real estate scene, indicating lucrative opportunities for commercial real estate brokers to engage new clients looking to invest in promising central Texas properties.

Demolition Underway at Avenue Lofts

Source: Austin.towers.net

Summary: The Avenue Lofts located at 410 East Fifth Street are being demolished to erect a 44-story apartment building with 350 units. The demolition started after extensive asbestos abatement work was performed within the historic building that was constructed in 1943, and was originally used as office space before its transformation into a loft-style condo building in 1999. An Austin-based developer, Wilson Capital, will initiate the new construction after reducing the scale of the initial plan for an 80-story building.

Why this matters: This information aids commercial real estate professionals in advising their clients about imminent large-scale residential development, allowing for insights into potential impacts on enclaved businesses and surrounding property values given the new apartments' proximity to a downtown transit hub.

Receiver for embattled Austin developer StoryBuilt asks investors for $2.5M in new funding

Source: Statesman.com

Summary: Austin-based developer, StoryBuilt, now under a court-ordered receivership, is grappling with significant financial problems that necessitate a request for an additional $2.5 million from investors. StoryBuilt, previously known for its role in urban development projects and infill constructions incorporating mixed-use developments, enters the plea for new funding amidst backlogs of payrolls, many looming foreclosures, and pre-existing lawsuits. Notably, the receivership came after an extensive company reorganization that included employee layoffs and executive departures. Stapleton Group, the appointed receiver, indicates that sans the funds, liquidation of crippling proportions awaits the company.

Why this matters: Understanding the financial strife of large-scale developers such as StoryBuilt helps commercial realtors advise their clients expertly on possible shifts in market conditions and future opportunities in purchasing land or properties, stress communication values during their exchanges with clients and applies this understanding in professional appraisal of returns on investments.

TRENDS & MARKET DYNAMICS

Apartment construction in the US hits record highs

Source: Citymonitor.ai

Summary: Apartment construction across the U.S., driven by pandemic-era shifts in renter demographics and demand, has hit record highs with an unprecedented 1.2 million new apartments added in the last three years. Despite facing future economic headwinds, the building boom, led by cities like Austin, Texas, shows no sign of letting up, with developers on track to add 460,860 new rental units by the end of 2023. The housing frenzy is predominantly concentrated in fast-growing metropolitan hubs where nearly 89% of completed projects are aimed at meeting the housing needs of high-income renters. Looking further out, a noted 15% year-over-year slowdown in new apartment completions is expected but recovery is projected by 2027.

Why this matters: Increased activity in high-growth regions like Austin offers a wealth of opportunities for commercial real estate professionals in the region to expand their portfolio and enhance their value to clients.

ARK Homes for Rent CEO breaks down Texas’ built-to-rent boom

Source: TheRealDeal.com

Summary: Jordan Kavana, CEO of ARK Homes for Rent, plans to invest and develop $3 billion into single-family rentals and built-to-rent properties in the Sun Belt areas, such as Texas, over the next five years. This move comes amid an upheaval in multifamily markets across Texas, with many upcoming units but a slowed new start. High rental demand, particularly with increasing populations and restricted financing options for potential owners, lends support to Kavana's alternative housing projects.

Why this matters: Staying informed about shifting trends, such as built-to-rent booms, helps Central Texas commercial real estate professionals proactively adapt their strategies, and provides opportunities to broaden client portfolios in response to evolving market demands.

I’m a Real Estate Agent: Buy New Construction Homes in These 5 Cities To Be Rich in 10 Years

Source: Finance.yahoo.com

Summary: The article presents an analysis of the best U.S cities to invest in new construction homes and identifies Austin, Texas as a viable option. Despite a recent drop in new construction homes, Austin's percentage remains high. The city also offers a steady job market being the second-highest in the country. Median sale price for a home stands at $570,000 which sees surge due to the increasing arrival of high-wage earners, driven by the city's expanding tech sector with companies such as Apple, Tesla, and Oracle establishing or growing their operations. Other cities detailed include Tulsa, Richmond, Elgin, and El Paso.

Why this matters: Knowing Austin's addressable market for new construction homess will enable real estate professionals to tap into the customers driven by the expanding tech sector, project potential ROI for their clients and align their services to housing demands in these sectors.

FINANCING & MANAGEMENT CHANGES

Patrick Burke Named Senior Managing Director of Build-To-Rent Property Management as RangeWater Expands Portfolio Nationally

Source: MultiFamilyBiz.com

Summary: Patrick Burke has been promoted to Senior Managing Director of Property Management, Build-to-Rent (BTR) at RangeWater Real Estate, a nationwide rental housing firm. The role includes overseeing the national BTR platform, both with the firm-owned portfolio and third-party management assignments. It's notable that Build-to-Rent properties now represent 23% of RangeWater's portfolio with over 22,901 homes nationwide managed. Furthermore, they have initiated projects at different locations, including Austin, Texas.

Why this matters: This is a clear sign of growing attention and investments to ‘Build-to-Rent’ projects, within which RangeWater has active developments, suggesting Austin, Texas commercial real estate professionals may see an industry growth in this area and should prepare for potential client inquiries or investment opportunities around BTR housing.

TODAYS PERMIT RUNDOWN

Exciting news from the bustling heart of Central Texas! We've got ourselves some hot permits to announce, soon to transform the local skylines.

Starting us off, we've got a high-dollar permit approved for a luxury multi-family project. The getaway oasis, aptly named the "Aqua Estates," promises elegance combined with practicality. Property owner, Jefferson Holdings LLC, expects this plush community to be a magnet for high-income dwellers. Details on the design firm are still under wraps, which can only mean one thing - a prestigious, to-be-announced design team is yet to make a grand entrance on this exciting project.

A stone's throw away, we have a permit that paves the way for the construction of an industrial park in our town. With an estimated project value of $5 million, property owner, Barton Creek Consortium, anticipates an influx of business activities. DFW Structures Inc., a seasoned veteran in the construction game, holds the design mantel. We sure can't wait to see the modern tenets of industrial design come to life with this one.

Moving into the healthcare sector, Alpha Care Health Systems is set to walk us down the path of wellness with a new outpatient clinic. Our hats off to BIM Healthcare Design, bringing innovation to healthcare architecture! We look forward to seeing how they’ll infuse their design philosophy into this project.

In the world of commercial real estate, you've already heard the buzz about Austin Investments planning a three-story office building for our growing hive of start-ups. The design heavyweight, Longhorn Architects, is gearing up to bring their A-game. We're anticipating some ground-breaking concepts and we're all thumbs up for more shared working spaces.

Finally, the municipal authorities have granted permits for the expansion of our ever-busy Downtown Fire Station. No design firm has been listed on this one, yet we hear, the design shortlist is ongoing. Be sure to keep one ear to the ground - the best is yet to come!

There you have it! Our pick of the litter. Stay tuned for more updates in tomorrow's roundup, as we keep track of the movers in our dynamic Central Texas construction sector.