Free Austin apartment locating
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New Round Rock apartment complex close to Dell, Hospital, Mall
City North at Sunrise Ranch apartments
Near I35 at Old Settlers Blvd and Round Rock Rd
Rents will range from $800-$1200/mo
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Austin apartment glut, rent cuts predicted- Others, however, say market -- especially for high-end, downtown units -- will stay healthy.
Too many apartments are being built across the Austin area, and that means some tenants can expect rent discounts and other concessions by year's end.
That's according to apartment industry research firm M/PF YieldStar, which shows June occupancy at 93.4 percent, off 1.5 points since March and 1.8 points from mid-2007. The decline is especially worrisome for landlords, coming during prime leasing season, said Greg Willett, the firm's vice president of research.
"I think it's time to raise the flag," Willett said. "I don't think people have realized how big a hole we're about to dig for this metro."
Willett says occupancy is headed down and predicts rents will flatten this year, then decline 3 percent or more in 2009. "The market remains in decent shape for the moment, but it's concerning that the loss of momentum is so pronounced," Willett said. "Plus, with so much additional product now under construction, it's pretty easy to see the headlights of that train bearing down on you."
Austin is on track to add 12,810 apartment units through the end of 2009, according to M/PF. That's the third biggest block of new supply on the way anywhere in the country, trailing only the 19,217 units under construction in Dallas/Fort Worth and the 18,848 units under way in Houston, M/PF reports. Willett said the Austin area needs about half as many units as are now under construction based on current demand, which he says has been sluggish. He said there are 1,070 fewer occupied apartments now than at the start of this year. He predicts it will take two years for Austin to burn off its excess supply "if you stop building right now."
Willett says his forecast of a glut applies citywide, from downtown to the suburbs. But Spencer Stuart, an executive with the developer building the 31-story Legacy on the Lake apartment tower on downtown's eastern edge, said leasing activity is strong in and near downtown, as well as areas closer in. "We're seeing strong demand in the urban cores of all the markets we're in," said Stuart, senior managing director of Legacy Partners Residential Development Inc., a Foster City, Calif., firm with upscale apartments in states including California, Arizona, Colorado and Washington.
Legacy entered the Austin market in 2006 with it and Capmark Financial Inc.'s acquisition of the 2,044-unit Riata apartment community in Northwest Austin. Riata was 97.1 percent occupied by the end of June, up from 89.8 percent as of Jan. 1, Stuart said.
Stuart predicts properties like Riata and the upscale apartments at the Domain in North Austin and in the downtown market are "going to do very well." Also, rising gas prices "bode very well for the downtown market and for properties that are clustered in around a lot of the jobs, like the Arboretum," Stuart said. "If you can walk to your job, you can pay more for rent, and your lifestyle got better because you're spending less time commuting and more time working or playing."
But Willett stands by his forecast, contending that the Austin metro area, which "ranked as the star apartment market performer in Texas over the past few years ... is losing its luster." He thinks the market will bottom out by the end of 2009 before occupancy begins ticking back up. "As more and more of this product gets completed, you're going to start seeing the rent discounts kick in, and we're going to be in an incredibly competitive leasing environment in Austin," Willett said.
Rent growth already is slowing. Rents rose 3.6 percent from June 2008 to June 2098, compared to a pace as high as 6.1 percent during 2007, according to M/PF. The average monthly rent is now $839, up from $787 in June 2008, M/PF said. Willett expects rents to be flat this year, as occupancy dips another 1.5 percentage points during the next 12 to 18 months. By year's end, he said, close to half of the apartment communities will be offering anywhere from a month to a month and a half of free rent.
"The leasing environment looks like it will be especially competitive at the top end of the market," Willett said. "Discounting probably will be rampant at the new communities in initial lease-up, and that seems apt to preclude any rent growth for the market as a whole."
Stuart thinks Willett will be proved wrong about the Austin market. He said he isn't worried about leasing up the 187-unit Legacy on the Lake, formerly Legacy@Town Lake. And the company is looking for a site for a second project, perhaps four stories tall, "as close to downtown as possible."
"We know there's a strong demand for the downtown lifestyle," Stuart said, adding that demand has been well- established in the Rainey Street area, where the Legacy project is rising, with the selling out of nearby condominium projects like Milago and the newly built Shore. Rents at Legacy on the Lake will range from $1,331 a month for a 659-square-foot unit to $6,931 a month for the four penthouses with 2,876 square feet, Stuart said. Leasing is expected to begin in August, with the first tenants moving in in October.
Stuart said Legacy could command — and get — higher rents for its downtown project but is sticking with the ones it initially projected in order to lease the building quickly.
At the new 29-story Monarch apartment tower on downtown's west side, 25 percent of the 305 units are occupied, and the building is 45 percent leased, representatives say.
Units rent from $1,333 a month for a 681-square-foot unit to $12,935 for the largest penthouse, with 3,530 square feet.
Monthly rents average $2,100 to $2,300 for the most popular one-bedroom, with about 1,100 square feet, and rents start at $2,630 for the most popular two-bedroom, with about 1,400 square feet.
Tenants include young professionals, entrepreneurs, executives, professors, a state senator, and transplants from New York and the West Coast, as well as people who plan to buy units in condominium projects now under construction downtown, representatives said.
Wave of new apartments under way
Developers, most analysts say demand in Austin is strong enough to fill new space.
Others are not so sure
A wave of apartments is under construction, and developers are counting on the area's appeal to pull in more residents to fill the space. More than 10,000 apartment units are planned to open in 2008/2009 according to first-quarter figures by Austin Investor Interests LLC, which analyzes rents and occupancy rates.
"We are very bullish in Austin in general and in particular, the downtown area," said Timm Wooten, executive vice president with Martin Fein Interests Ltd., the Houston-based developer. "The desire to live close to downtown and the growth of Austin will support it," he said. Many of the developments are popping up in South Austin, Central Austin and downtown and include the Monarch, Red River Flats and AMLI on Second Street.
At the Domain in North Austin, 390 luxury apartments are saddled into the open-air upscale development, with one-bedroom units starting at $999 per month and going up to $2,244.
But Robin Davis, manager of Austin Investor Interests says. "Occupancy is remaining flat because we have an increase in the rental base. It's not because there's not demand." Management companies are trying to compete against the new apartments and condos that are becoming available, she said. "We have a plethora of condos that are going to turn into rental housing when they don't sell," she said.
Others who study the market, as well as developers, disagree and still expect occupancy rates to remain steady. At 93.5 percent in the first quarter, apartment occupancies are still off from the peak levels of 98.2 percent in December 2000, during the tech boom. The job losses that resulted from the tech bust then clashed with a building boom, causing the occupancy rate to plummet at the end of 2000 to 88.4 percent in the first quarter of 2002. Even as late as 2004, some apartment projects were posted for foreclosure.
Now, with people moving at a faster clip to the Central Texas area from other states, developers expect more residents to look to the rental market before they buy. And occupancy rates above 92 percent equate to a landlord's market, said Charles Heimsath, president of Capitol Market Research, which tracks the apartment market.
"The market is really solid and will continue to be strong into 2008," said Heimsath, who is forecasting 5,500 units to come on line this year. "We should easily be able to absorb those units." Heimsath also predicts that the rents — which increased 6 percent citywide last year — will continue to climb, from 3 percent to 8 percent this year, depending on the proximity to downtown.
The amenities offered at complexes also are changing, with hot tubs and laundry rooms disappearing and being replaced with in-room washers and dryers, granite countertops, free cable and wireless Internet capabilities
The Robertson Hill Apartments in East Austin just opened the first of 290 upscale units this month. The complex, on San Marcos Street between Ninth and 11th streets, features one-bedroom apartments that start at $1,240 and two-bedroom units going for $2,600. The increased demand for urban living is propelling the wave, analysts say.
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SIMON PROPERTY MASTER OF ITS DOMAIN
AUSTIN (globest.com) – More than a year after opening the $245 million first phase of its Domain mixed-use project, Simon Property Group Inc. is preparing to break ground on phase two.
Work will begin in June on the additional 631,000 sf of retail, 75,000 sf of office, 411 residential units and a 340-key Westin hotel.
The 27-acre Domain II will be anchored by a 200,000-sf, three-story Dillard's; 80,000-sf, two-story Dick's Sporting Goods; and an eight-screen Village Road Show Gold Class Cinema.
The project is slated to be completed in November 2009.
Southpark Meadows has two apartment projects totaling 670 units planned
Homes and apartments will soon spring up around Southpark Meadows, a 1.6 million-square-foot shopping center being developed by Endeavor Real Estate Group LLC at I-35 and Slaughter Lane.Preparations for streets, utilities and drainage for the first 121 lots will begin next month. Construction on the homes will start about six months later, with the first buyers expected to move in next April or May. Prices will range from $280,000 to $350,000. A second and possibly third phase would add another 260 homes in similar price ranges.
Grand Prairie–based Fairfield Residential LLC has two apartment projects totaling 670 units planned for the area. Grading work will begin soon on the first project. The 426-unit initial phase will be ready next spring, with second-phase units following shortly after.
The average-size unit in phase one — 879 square feet — will rent for about $990 a month, while the average-size unit in phase two — 926 square feet — will rent for about $1,075 a month
Austin rental market
Occupancy: 92.6%
Price $753/month
Rental Rate 88.7 cents per sq ft per month
Size: 849sf
Recently Opened
9 communities
138,300 units
Under Construction:
20 communities
4,750 units
Proposed Construction
21 communities
5,680 units
Source:Texas Apartment Association magazine
Apartment Data Services, Inc
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Developer chosen for first apartments at Mueller Airport
Simmons Vedder will build the first residential component in
former airport's transformation.
After years of planning, the transformation of the former Robert Mueller Municipal Airport is ready for takeoff. Major components are under construction, including the Dell Children's Medical Center of Central Texas, offices and the first stores.
MUELLER MULTI-FAMILY CONSTRUCTION
The Mosaic at Mueller the first multifamily development at the former Robert Mueller Municipal Airport is up and running.
The Mosaic at Mueller is a $45 million, 440,000-square-foot complex with 442 apartment units. It was developed by Austin- and Houston-based Simmons Vedder & Co. in partnership with Dallas-based Crow Holdings Realty Partners IV LP.
Mosaic at Mueller includes one-, two- and three-bedroom units ranging from 580 to 1750 sf. Monthly rents will range from $850 to $2500.and include swimming pools, a clubroom, fitness center and a business center.
For example, the apartments have heat-reflecting metal roofs and energy-saving features, and half of the construction debris will be salvaged or recycled.
In Austin, its highest-profile project is the apartment complex at the Triangle, a 22-acre residential/retail project in Central Austin. It's also a developer of two large mixed-use projects in Williamson County.
The mixed-use development is the largest public-private venture in Austin's history and will transform the former airport into an urban village of homes, stores,and offices. The project is expected to add $1 billion to the city's tax base and house up to 10,000 residents and generate thousands of jobs.
Major medical facilities are under way, including the Dell Children's Medical Center of Central Texas, which is scheduled to open in 2007 and Strictly Pediatrics Ambulatory Surgical Center, a children's specialty medical facility.
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BEE CAVES GETS NEW RESIDENCES
BEE CAVES VILLAGE – Criterion Property Company LP, a company which previously has developed apartments in Massachusetts, has entered the Texas multifamily market with the Windsor at Bee Caves Village. The complex has 293 luxury units on Hwy 71, a nineteen acre site adjacent to the Hill Country Galleria and the Shops at the Galleria.
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CRITERION'S MULTIFAMILY DEVELOPMENTS
AUSTIN– Dallas developer Criterion Development Partners has purchased two parcels totaling 50 acres from Continental Properties Co. Inc. of Wisconsin. Multifamily developments are in the works for both.
Criterion has broken ground on the 330-unit Criterion at Onion Creek, which will go up on the 26 acres at Slaughter Lane and I-35. The development, which was designed by MSA Architects Inc. of Cincinnati, will be completed by mid-2008. WaterMark Construction LP in Addison is the general contractor.
The 400-unit Criterion at Harris Ridge will be built on 24 acres at Howard Lane and Dessau Rd. Construction will begin early next year.
Boston-based General Investment & Development Cos. will manage both properties.
Colonial invests $87M in Austin
The 3 new complexes, which all completed recently, added a total of roughly 1,000 new apartment units to the local market.
Birmingham-based Colonial Properties Trust owns or manages over 48,000 apartment units, nearly 8 million square feet of office space and 13 million sf of retail space.
Paul Earle, executive vp of the company's multifamily division.says "Austin fits the company's criteria for investment, with its top-quartile placement in terms of job growth, population growth and household income growth," "Austin ranks in the top five places to consider for investment opportunities." using their estimates
The 3 complexes here include:
Colonial Grand at Round Rock near U.S. Highway 79 and FM 1460. A 422-unit apt complex
Colonial Grand at Canyon Creek west of Lakeline Mall off RR 620, A 336-unit complex
Colonial Grand at Silverado Reserve - Parmer Lane in Cedar Park TX. The 250+ unit complex is accompanied by a 238-unit complex across the street. also owned by Colonial.Properties
Jefferson Properties was considered the dominant player in the local multifamily market during the 90s. By contrast, the Irving, based company doesn't have much of a development presence in Austin yet,
He says "It looks to me that Colonial is positioning itself to be the JPI of this decade,"
Heimsath is also quick to add Colonial has serious competition in its quest for market dominance -- for example, from Gables Residential Trust, which was purchased in June by a partnership managed by ING Clarion Partners., and Trammell Crow Residential., now Riverstone Res.
For Immediate Help
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Toll Free 1.888.217.5200
call anytime including evenings and weekends
Austin-San Marcos, TX 5+ Family Building Permits
November 2007YearNumber of Dwelling Units Average Value per Dwelling Unit ($)
Number of Dwelling Units Average Value per Dwelling Unit ($)UnitsPercentValuePercent Change Change19802,862-16,900-
2,862-16,900-19814,9097224,50045
4,9097224,5004519824,782-328,50016
4,782-328,50016198316,16123820,500-28
16,16123820,500-28198411,950-2624,90021
11,950-2624,9002119858,970-2522,100-11
8,970-2522,100-1119865,954-3423,7007
5,954-3423,700719871,000-8319,100-19
1,000-8319,100-191988305-7068,900261
305-7068,9002611989 8 -97 75,0009
8 -97 75,00091990 0 -100- -
-100- -1991220-30,600-
220-30,600-199299635318,600-39
99635318,600-3919932,08410927,00045
2,08410927,0004519944,40311134,20027
4,40311134,2002719956,1333937,0008
6,1333937,000819966,484636,200-2
6,484636,200-219974,720-2740,50012
4,720-2740,5001219985,128934,900-14
5,128934,900-1419997,8495340,70017
7,8495340,7001720008,064341,0001
8,064341,000120018,345336,800-10
8,345336,800-1020025,570-3338,5005
5,570-3338,500520032,499-5554,50042
2,499-5554,5004220043,1062456,7004
3,1062456,700420055,2616953,300-6
5,2616953,300-6Source: U.S. Bureau of Census and Real Estate Center at Texas A&M University
Note: MSA data is base on 1999 MSA definitions.
New apartment complexes in Austin, Round Rock & Cedar Park
New apartment complexes in Austin Texas: North Austin region of Colonial Properties Trust, Colonial Grand at Silverado in Cedar Park, Parmer Ln Lane, Colonial Grand at Round Rock TX, Colonial Grand at Canyon Creek off RR 620, Jefferson Properties, JPI, Gables Residential Trust, NG Clarion Partners,Trammell Crow Residential.
New apartment complexes in Austin, Round Rock & Cedar Park - New apartment s in Austin Texas: North Austin region of Colonial Properties Trust, Colonial Grand at Silverado in Cedar Park, Parmer Ln Lane, Colonial Grand at Round Rock TX, Colonial Grand at Canyon Creek off RR 620, Jefferson Properties, JPI, Gables Residential Trust, NG Clarion Partners, Trammell Crow Residential New apartments planned at 183 & 620 with 2100 units, to exceed the size of Riata
A listing of construction activity in the Austin-area apartment market (# of units)
Alexan at Vaught Ranch, 334
Alexan Hill Country Galleria, 309
Colonial Grand at Double Creek, 300
Criterion at Onion Creek, 330
Fairfield at Southpark Meadows, 426
Forest Hills, 208
La Frontera Square, 349
Park at Brushy Creek, 360
Verde Brushy Creek, 272
Continuing construction , units
101 Colorado, 259
300 N. Lamar, 154
Alexan Swenson Farms Ph. I, 336
Altea at Silverado, 300
AMLI on 2nd, 231
AMLI Anderson Mill, 396
Arboleda, 312
Balcones Ranch, 270
Bella Sarah, 294
Block on 28th, 101
Block on Leon, 133
Block on Pearl Street, 96
The Crescent, 169
Cypress Creek at Riverbend, 180
Gables Westlake, 175
Greystar at South Congress, 306
Harris Branch, 246
Jefferson at West Campus, 367
Links at Forest Creek, 216
Mariposa at Riverbend, 201
Melograno at Teravista, 320
Monarch, 305
Parker Lane Seniors, 70
Quarters at Grayson House, 101
Quarters at Nueces House, 235
Red River Flats, 120
The Remington, 344
Residences at the Domain, 390
Robertson Hill, 290
San Gabriel Senior Village, 100
Verde Shadowbrook, 248
Windsor at Bee Cave, 293
