Elco Landmark Partners in Acquisition of Four Multifamily Properties

By Anca Gagiuc, Associate Editor

Four garden-style multifamily properties in San Antonio and the Austin submarket of Round Rock have been acquired by a newly formed partnership between Elco Landmark Apartment Trust Holdings LLC, DeBartolo Development LLC and LEM Capital. The combined price is of approximately $44 million.

The four communities total 771 units with a 95 percent occupancy level. Amenities include a clubhouse, swimming pool, spa/hot tub, tennis courts, picnic areas, fitness center and laundry facility. Renovation and repositioning programs are planned in order to improve the physical structure and aesthetics of the properties, as well as to increase the value and financial gain opportunities.

The former Hampton North, today Landmark at Amelia Ridge, is located at 1500 Lawnmont Dr. in Round Rock, Texas. It has 188 units that were built in 1985. Landmark at Auburn Manor was known before acquisition as Vista Ridge and is located at 1200 South Mays St., also in Round Rock. Its 200 units were built in 1984.

The other two residential communities—Landmark at Atrium Commons and Landmark at Stratton Park—are located in San Antonio and were built in 1983 and 1985, containing 256 and 127 units, respectively.

“The acquisition of these assets is another example of our unique ability to source attractive investment opportunities in high-growth metropolitan markets located across the South,” said Joseph Lubeck, CEO of Elco Landmark Residential. “We look forward to leveraging our redevelopment and repositioning expertise to improve the quality of each asset, creating an enhanced living environment for tenants while allowing us to capture unrealized cash flow potential.” 

Elco Landmark Residential is a real estate investment firm headquartered in Tampa, Fla. that manages and owns interests in 17,762 units from 59 multifamily properties spread across the Southeastern part of the country. The company’s mission is to purchase mid-income multifamily properties below market value and reposition them on the South market where they have competitive advantage and plenty of expertise. DeBartolo Development LLC is one of the largest privately owned real estate development companies in the country, and LEM Capital is a real estate fund manager.

 Chart courtesy of Marcus & MIllichap

$500M Mixed-Use Trio of Towers Proposed for Downtown Austin

By Anca Gagiuc, Associate Editor

“Every project begins with a vision, and this is a grand vision on a great site,” said local real estate consultant Charles Heimsath about the proposed plan to build a $500M mixed-use project downtown Austin. If the plan receives approval from the city, the Austin skyline will change dramatically through the addition of three new towers, one of which could become the city’s tallest building.  

Developers Mac Pike and Wally Scott, principals of Sutton Company, revealed they plan to build the project on three acres of prime real estate along the banks of Waller Creek. This could become Waller Center, a trio of towers that includes a residential tower of 35 to 45 stories, an office/retail tower of 17 to 20 stories, and a condo/hotel tower that aims for 65 stories.

Shops and restaurants are part of the original plan, similar to the design of San Antonio’s Riverwalk. Pike said he intends to submit a site plan to the city in the next 90 days, hoping to start work on all three towers in mid-2014, pending city approvals.

The tract has no height limitations, as the area is zoned for dense downtown development, said Pike in an interview with the Austin American-Statesman. And it might stand a chance of becoming a reality thanks to a major equity player on board, Klabzuba Realty—a family-owned real estate, oil and gas investment company based in Fort Worth.

The Waller Creek tract is either owned or controlled by entities of local developer Perry Lopez, who says that “these are serious buyers with an ongoing substantial financial investment in the property.”

“They control it and are working on all aspects of use and design,” he adds. “Obviously, it is a real challenge to put together a project of this magnitude, but we feel they are up to it or we wouldn’t be working with them.”

While the estimated cost has been made public, the acquisition manager for Klabzuba, Paul Nauschutz Jr., did not reveal the extent to which the Fort Worth company would finance the project. He confirmed the partnership, meeting Heimsath’s opinion, who stated: “With a substantial equity partner in the deal, I think this project has a good potential to get over the finish line.”

Photo credits: www.mystatesman.com/

180,000-Sq.-Ft. Shopping Center Purchased by Misuma Holdings

By Anca Gagiuc, Associate Editor

Austin’s 180,000-square-foot shopping center, Lincoln Village, has just been purchased by veteran developers Misuma Holdings for an undisclosed sum. The new owner has not made public its plans regarding the repositioning of the acquisition, but the involved parties can await consistent changes throughout the year. Among the current tenants are Chase Bank, Gold’s Gym, the Marchesa Theater and Men’s Warehouse. 

Misuma Holdings had its eyes on the shopping center partly due to redevelopments that represent consistent growth in the area. Good indicators in this regard were the Highland Mall, remodeled by Austin Community College; the construction of several new residential communities; the revival of the Airport Boulevard; and the prosperous reuse of the Mueller Airport.

“Lincoln Village has the ingredients required for a successful real estate repositioning,” said in a news release Dean Davidov, partner at Misuma Holdings. “It is in a prime location at the intersection of Interstate 35 & Highway 290.  The shopping center is surrounded by several major developments in a growing and dynamic community.”

Davidov added: “We are excited to bring new vision and energy to the project including capital improvements, new and complementary tenants, re-branding, highway signage, and potential mixed use elements.  We expect the property to be the link between all the urban in-fill projects in central Austin.”

Beverly Hills-based Misuma Holdings is a commercial real estate development firm focusing on ample retail, office and mixed-use property types. With over 30 years of experience in the field, the company has owned and built over three million square feet of retail space across Texas, this next to other commercial properties nationwide. They are known for their interest in purchasing distressed commercial development projects, which through proactive involvement receive added value.

Photo credits: CBRE

Eleven Community to Open this Summer, Pre-leasing Underway

By Anca Gagiuc, Associate Editor

Located in one of Forbes’ “hippest Neighborhoods” in the heart of East Austin, the Eleven apartment community began pre-leasing on April 1, 2013 in the Haehnel Building on East 11^th Street. It will be ready to receive residents this summer.

The apartment complex is an elegant podium-style six-story building with 257 units that suit a wide range of lifestyle needs—studio apartments at 416 square feet, one-bedroom apartments at 678 square feet and two-bedroom apartments at 1020 square feet with island kitchens, 10-foot ceilings and vinyl wood plank floors. The exterior is a durable combination of native stone and stucco designed by award-winning Texas-based BGO Architects, and the interior design is the work of Kathy Andrews Interiors, an award-winning firm specializing in multifamily projects.

The Forester Group is the lead developer. They are working on the project together with the Canyon Johnson Urban Fund. Leasing and managing the Eleven community rests with Alliance Residential Company.

Amenity-wise, Eleven raises the stakes for high-end communities in the ever-growing city. Austin was recently ranked as the second Best Performing Metro City in the United States by the Milken Institute. The common swimming pool and lounge area with covered cabanas has its value increased by a rooftop lounge with breathtaking views of the Texas State Capitol. Additionally, a clubhouse with an open gaming area, billiards and shuffle board is complemented by a bicycle workshop.

Interest in health is shown through a fully equipped athletic facility on site, while the grills in the courtyard, a life-size chessboard and bocce ball will likely keep tenants outdoor for longer periods of time.

Karlin Real Estate Acquires 186,000-Sq.-Ft. Plaza 35

By Camelia Bulea, Associate Editor

Karlin Real Estate, one of the most active real estate investors in Austin, recently closed another acquisition. The Los Angeles-based investor purchased Plaza 35, a 186,000-square-foot property at 12234 N. I-35. The office complex is made up of two buildings that were built in 2000 and were owned by Stream Realty, according to the Austin Business Journal.

At the time of the sale, the Class B property was 100 percent occupied by Yodle Inc., VirTex Assembly Services and Logisticare Solutions LLC, adds the Journal. The two-building office center is considered to be a very attractive investment due to its strategic position, near the major intersection of Interstate 35 and U.S. Highway 183, which places it in the heart of the high-growth region of North Austin.

In the past three years, Karlin has been an active buyer in Austin. In the spring of 2011, Karlin Real Estate acquired from Dell a vacant 301,644 square-foot Class A corporate headquarters and manufacturing facility in northeast Austin in the proximity of Plaza 35. The property is located in the Tech Ridge area, a commercial and retail district containing Dell’s North and South Parmer Campuses, as well as several large retail centers.

“We saw this as a great opportunity to acquire a well located, institutional quality asset in a city that leads the nation in job growth,” said Managing Director Matthew Schwab.

Plaza 35, courtesy of LoopNet

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AMD Sells and Leases Back Lone Star Campus, Generates $164M in Cash

By Camelia Bulea, Associate Editor

Advanced Micro Devices Inc. is close to signing a sell-and-leaseback deal that is expected to generate approximately $164 million in cash. The technology company recently announced in a news release that an affiliate entity of real estate investment company Spear Street Capital agreed to buy the property at 7171 Southwest Pkwy. Once the deal closes on March 26, AMD will enter a 12-year lease for the 812,350-square-foot complex, according to the Austin Business Journal. The tenant will have the option to continue its operations on the campus after 12 years if it chooses.

“The sale of our Austin campus will unlock a significant amount of capital, while the multi-year leaseback of our Austin campus reconfirms our long-term commitment to the city that so many AMD employees have called home since 1979,” said Devinder Kumar, chief financial officer of AMD. The company also has offices in Sunnyvale, Calif. and Markham, Ontario, but the Austin campus is the biggest of the three. AMD has around 1,900 employees in Austin.

The Business Journal reports that AMD would pay about $21 million in rent during the first two years. Additionally, the company expects to record circa $50 million in the first quarter of this year, a sum related to the difference between the sale proceeds and the carrying value of the property, according to an official statement by AMD.

Sell-and-leaseback practices are used by companies that want to raise money very quickly without having to disrupt their business. AMD seems to prefer this kind of practice, as its headquarters in Sunnyvale is also currently under lease. Moreover, in 2008 the company sold its big site in Ontario, Canada under a similar lease agreement.

Image via Flickr user James Cubed Design

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Foundation Communities Plans 109-unit Affordable Project

By Camelia Bulea, Associate Editor

Foundation Communities plans to build a residential project with affordable units at 2800 S. Lamar Blvd.—a booming area with upscale multifamily projects. The local nonprofit could build the 109-unit project on a site that currently houses a Goodwill retail store.

The entire project, called Skyview Studios, would cost $15 million to build, out of which the developer hopes to receive $10 million in federal tax credits, according to The Austin-American Statesman. If the project receives the credits, the Austin City Council will contribute with $1.8 million to fund the project. The rest of the money needed to build the community would come from fundraising.

The four-story building is planned to have a new 14,000-square-foot Goodwill store on the ground floor and more parking lots than the initial store – a total of 60 spaces. Monthly rates would range between $400 and $650 a month including utilities, said Walter Moreau, executive director of Foundation Communities, as quoted by the The Statesman. Skyview Studios, with units of about 400 square feet, will target individuals with annual incomes under $26,000.

If all goes according to plan, construction could begin in the spring of 2014, with completion expected to happen a year thereafter. When complete, Skyview will be the sixth apartment community developed by Foundation Communities in Austin—with a total number of 600 affordable units.

The project has received a lot of support from philanthropists and different local associations, being one of the few current developments to provide housing for low-income people in Austin. Although the city is booming with apartment projects, most of the multifamily communities planned in the area offer luxury units and not enough affordable ones.

Photo rendering of Capital Studios, another affordable project developed by Foundation Communities in Austin

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327-room Boutique Hotel to Break Ground This Summer in Downtown Austin

By Camelia Bulea, Associate Editor

JMI Realty is finally able to look forward its 327-room hotel project in downtown Austin. After five years of being stalled due to the economic recession, the hospitality project is now on track—expected to break ground by June 2013.

The 16-story hotel will be operated by Kimpton Hotels—a San Francisco company that specializes in chic boutique hotels, notes the Austin Business Journal. The building will also include a three-level underground parking garage, three-meal restaurant, 6,800-square-foot pool deck and bar, about 12,000 square feet of meeting space, and a 1,300-square-foot exercise facility.

Dubbed Hotel Van Zandt, the initial 2008 project included a 29-story hotel and residential tower, which would have required a $100 million investment but was scaled back to a 346,000-square-foot hotel designed by Dallas-based WDG-Habib Architecture Inc.

According to JMI Realty, the Van Zandt will be the only boutique hotel in downtown Austin and is designed to capture the unique attitude and culture of the community. Given its location two blocks southeast of the Austin Convention Center, one block east of Town Lake and 1.8 miles from the Texas Capitol Building, the hotel will be appealing for both business and leaisure travelers.

Austin is a booming hotel market with many hospitality projects under construction this year. Back in January, Hotel ZaZa developers received initial approval from the Austin City Council to proceed with their 24-story hotel project.

Additionally, the $350 million Fairmont Austin is scheduled to break ground in October 2013. When complete in 2016, the 50-story, 1,000-room hotel will be Austin’s second tallest building.

Photo credits: JMI Realty

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National Instruments Considers Major Investment in Austin

By Camelia Bulea, Associate Editor

National Instruments Corp. is considering adding 1,000 jobs to its Austin headquarters over the next 10 years and an $80 million investment to the Texas capital. The engineering toolmaker plans to expand its research and development by building a new $47 million facility and investing $33 million in business equipment, reports the Austin Business Journal.

In exchange, the company could get $1.7 million in performance-based city tax breaks if the Austin City Council approves a deal. If approved, the state will provide $4.4 million through the Texas Enterprise Fund. The average annual salary for the new positions is $72,223, according to its incentives application with the city and as reported by the Austin American-Statesman.

According to documents released by the city of Austin, the deal could generate a net benefit of $7.6 million, including the incentive. For the moment, the company is also considering another option for this deal outside the U.S. in Penang, Malaysia, reports the local publication.

If the company chooses Austin, plans call for a 300,000-square-foot facility on 8.5 acres adjacent to its North Austin headquarters off Mopac Expressway. Construction on the new facility is expected to start on July 1.

National Instruments is an important employer in Austin, currently staffing about 2,273 in the city. Additionally, it works with 3,500 Central Texas students each year. The Austin City Council is scheduled to be briefed on the project Feb. 28 and vote on the incentives offer March 7.

National Instruments campus in Austin, courtesy of Wikipedia.org

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JV to Deliver New Luxury Apartment Tower in Downtown Austin

By Camelia Bulea, Associate Editor

StreetLights Residential and Hunt Companies Inc. have formed a partnership that will build a 19-story glass and brick tower at 214 Barton Springs Rd. just south of the Hyatt Regency Austin. The project is valued at $68 million.

Designed by Austin-based Rhode Partners, the luxury multifamily project will feature 300 apartment homes with high-design elements modeled after a boutique hotel. The apartments will average 900 square feet in size, according to an official statement by Hunt Companies Inc.

“This property will represent well-crafted urban architecture, interiors, landscape, art and technology,” said Doug Chesnut, CEO of StreetLights Residential. Due to the beautiful location of the property, residents will be able to enjoy panoramic views of Lady Bird Lake, the downtown skyline, the State Capitol and West Hills.

The new tower will feature high-end amenities such as a boutique hotel-style lobby with intimate conversation areas and a coffee bar, a resort-style pool deck with skyline views, a spacious fitness center, and a rooftop lounge.

The project owner is SLR Residential at Barton Springs, whose members are Hunt Development Group LLC and Hunt Barton Springs—both affiliates of Hunt Companies Inc., as well as SLR Residential at Barton Springs LLC—an affiliate of StreetLights Residential.

According to the Austin Business Journal, construction should begin in the spring, with a completion date set for August 2014.

Due to the high demand for new rental units in Austin, several other multifamily projects are currently under construction in the downtown area, as reported by the Business Journal:

• SkyHouse Austin at 512 Rainey St.
• Gables Park Plaza II at 111 Sandra Muraida Way
• Whitley apartments at 301 Brazos St.

Image rendering of the high-rise tower, courtesy of www.streetlightsres.com

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Last Lots in Twin Creeks Development Sold; Builders to Break Ground on New Homes

By Camelia Bulea, Associate Editor

Standard Pacific Homes and Ryland Homes have purchased the remaining 201 lots in the Twin Creeks master-planned community located in Cedar Park. Together the builders will develop the Reserve at Twin Creeks—the last section that remains undeveloped in the subdivision, which currently counts for 800 homes.

Standard Pacific Homes officially announced the acquisition of 75 home sites in the 760-acre community and plans to break ground on the first homes in February. 16 new home designs will be unveiled when sales start in the spring of 2013. According to its official statement, the builder will offer one- and two-story designs ranging in price from the mid-$300,000–$600,000 range.

Ryland Homes purchased the other 126 home lots and will have offerings in three neighborhoods of the master-planned community. According to The Statesman, their homes will be divided as follows:

• 50 townhomes ranging in price from the low $200,000s to the upper $200,000;
• 76 houses will be priced from about $350,000 to the upper $600,000s.

The housing market in Central Texas and Austin in particular began recovering in 2012 and is expected to gain further momentum this year. Eldon Rude, head of the Austin market for Metrostudy, forecasts that builders will start construction on circa 9,000 to 10,000 new homes this year, as compared to 7,981 housing starts recorded last year in Central Texas.

The high demand for new housing units is also explained by the 2013 annual list of “America’s 20 Fastest Growing Cities” published annually by Forbes. For the third year in a row, Austin is the fastest growing city in the country, based on six metrics:

• estimated rate of population growth for 2012;
• estimated rate of population growth for 2013;
• rate of job growth in 2012;
• rate of gross metro product growth for 2012;
• federal unemployment data;
• and median salaries for local college-educated workers.

Photo credits: www.twincreeks.com

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McNeil Ranch Community Sold for $21M

By Camelia Bulea, Associate Editor

Preferred Apartment Communities Inc. has grown its multifamily portfolio with 928 new units located in Atlanta, Austin and Raleigh. The Maryland-based real estate investment trust recently closed on the acquisition of three multifamily properties in these cities for a total of $90.8 million.

Called McNeil Ranch, the Austin community consists of 192 rental units and was 97.4 percent occupied at the time of the sale, according to a company’s news release. The multifamily community was completed in 1999. Although the new owner will continue to use the McNeil Ranch name, the Austin rental community will be re-branded as a “Preferred Apartment Community.“

PAC paid about $21 million for the property, or about $110,000 per unit.

The other two multifamily deals included in the 1.08 million-square-foot portfolio are:

• Ashford Park—408 units in Atlanta’s Central Perimeter submarket; purchase price of $39.4 million and an occupancy rate of 93.9 percent
• Lake Cameron—328 units in Apex, N.C.; purchase price of $30.4 million and an occupancy rate of 92.4 percent

Financing for the properties was secured through Prudential Multifamily Mortgage Inc. and Jones Lang LaSalle Operations LLC.

The Austin apartment market continued to show positive signs in the fourth quarter of 2012. According to Marcus & Millichap, vacancy has dipped to its lowest point in over a decade, which resulted into a growing construction pipeline and increased asking rents. The analysts at Marcus & Millichap report that there were nearly 11,000 units under construction with completion dates scheduled through 2014.

Additionally, high demand for rental units due to job growth in the tech sector and limited apartment completions caused vacancy to dip 130 basis points to 4.1 percent in 2012, as illustrated in the chart on the left.

Photo courtesy to http://mcneilranch.com

Charts courtesy of Marcus & Millichap Research Services

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Hotel ZaZa Project Moves Forward, Gets Planning Commission Approval

By Camelia Bulea, Associate Editor

Despite opposition from residents currently living at the nearby Plaza Lofts, a controversial hotel recently received an Austin Planning Commission recommendation. Represented by Coats, Rose, Yale, Ryman & Lee’s John Joseph, nearby residents worry that the new project will obstruct their views; that music from the pool deck will be too loud; and that there will be increased traffic on the alley between the buildings, noted the Austin Business Journal.

The site on which the mixed-use project would be built is already zoned as a CBD.

The 24-story mixed-use project called Hotel ZaZa is planned on West Fourth Street between Guadalupe and Lavaca streets, very close to the residential property. According to its developer, Gables Residential, the new project will include 215 luxury apartments and a 160-room boutique hotel under the ZaZa brand.

The project would also feature two pools overlooking Republic Square Park, multiple restaurants and a luxurious ZaSpa.

Hotel ZaZa is considered to be one of the most successful brands and innovators in the boutique hotel field. Currently operating in Dallas and Houston, the brand’s officials had been scoping out an Austin location for years before settling on the almost one-acre site, which is now used for parking.

There are still hopes that the project will break ground in the second half of this year, with a completion date expected for the first semester of 2015, according to The Austin-American Statesman. 2015 will also mark the opening of another massive hospitality project in downtown Austin—the 1000-room JW Marriott planned near the Austin Convention Center.

Photo rendering of the proposed Hotel ZaZa, courtesy of Austin American-Statesman

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SunCal Buys Manor Master-Planned Community, Plans to Finish Project

By Camelia Bulea, Associate Editor

SunCal, an Irvine, Calif.-based residential development company, recently closed a deal on the 758-acre ShadowGlen master-planned community in Manor, an eastern suburb located just 14 miles from Austin’s city center. The buyer paid $15 million for the partially developed community, which dates back to 2003.

Until the time of sale, 850 lots had been developed and more than 700 homes had been sold, as SunCal stated in a news release. Additionally, a four-acre water park and state-of-the-art recreation center have been completed, along with infrastructure throughout the property. The seller is 2010 ShadowGlen LLC, a partnership between Dwyer Realty in Manor and MHI Partnership Ltd. in Austin.

The new owner is expected to finish the project, which should have 3,000 homes, ample parkland and walking trails when complete. Land Advisors Organization in Austin handled the $15 million transaction.

“We’re very pleased to acquire this exceptional development in the Austin market, which is one of the fastest-growing areas in the nation,” declared Randy Teteak, SunCal executive vice president. This is the company’s first acquisition in Austin but not the last, as it appears SunCal is currently looking for additional investment in the metro area, as well as other metros throughout the United States.

In fact, the company finished 2012 with a $19.8 million purchase of a 208-acre master-planned community in North Las Vegas.

“We adopted the philosophy that now is the time to buy land—a generational opportunity to acquire,” said Brad Shuckhart, vice president of land acquisitions at SunCal Companies. “We think we’re on the precipice of a real recovery and a pickup in demand for new homes.”

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Work Begins on 36-story Apartment Tower in Downtown Austin

By Camelia Bulea, Associate Editor

A partnership comprising San Antonio-based Lynd and Austin-based Endeavor Real Estate Group broke ground last week on a planned 36-story tower that will add 358 luxury units to downtown Austin. Developers plan to complete the project in the third quarter of 2014.

The tower will include 4,000 square feet of ground floor retail, a 463-space parking garage on floors one through seven, 41,000 square feet of office space on floors eight and nine, and residences on floors 10 through 35, according to Multi-Housing News. Known as 3 eleven Bowie, the unique project will also feature the highest swimming pool in Austin, a fitness center, catering kitchen and additional grilling areas on the 36^th floor rooftop.

The luxury rental property is just one of the multiple residential projects that are changing Austin’s downtown landscape. The city is one of few in the country to record such high demand for new housing units. The Austin-American Statesman presents three other upscale apartment properties currently under construction in the downtown area:

• Gables Park Plaza (second phase) – an 18-story tower with 222 units;
• The Whitley – a 16-story tower with 277 units;
• SkyHouse – a $67 million, 23-story skyscraper with 320 units.

Additionally, two more residential projects will soon break ground in the area, adding circa 520 new apartment units to Austin’s housing stock. With an occupation rate of 97 percent, average rents in downtown Austin are more than double the city average—reaching $2,257 a month.

Photo rendering of 3 eleven Bowie by HKS Architects, via Austin Towers

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Austin Apartment Community Changes Hands in $35M Deal

By Camelia Bulea, Associate Editor

The Dayton-based Connor Group recently purchased 290-unit River Oaks—a 40-acre gated apartment community located at 6607 Brodie Ln.—for $34.6 million. Built in 1997, the property includes amenities like a pool, spa, volleyball court and basketball court.

The multifamily deal marks the second acquisition in Austin by the real estate investment firm. The Connor Group first entered the Austin market in August, with the purchase of Camden South Congress—a 253-unit multifamily property subsequently renamed Cityview at SoCo, according to the Dayton Business Journal.

Quoting Larry Connor, managing partner at the Connor Group, the Austin Business Journal reports that the real estate company is bullish on the Austin multifamily market, and that more acquisitions are in the works. The investor is looking to raise circa $100 million in the next year to finance more acquisitions.

In a recent market report, Marcus & Millichap analysts noted that job growth across Austin metro was creating high demand for apartments, and that vacancy had dipped to the lowest point in over a decade. Marcus & Millichap forecasts that, by year’s end, vacancy will fall 90 basis points to 4 percent on a net absorption of 3,600 units, as illustrated in the chart on the left.

Moreover, due to the low vacancy rates, asking rents jumped 3.8 percent during the last year to $911 per month.

 Photo rendering of River Oaks, courtesy of www.riveroaksaustin.com

Chart courtesy of Marcus & Millichap Research Services

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New Federal Courthouse Opens in Austin; $304M Apple Campus Underway

By Camelia Bulea, Associate Editor

Austin’s federal courthouse has found a new home in an eight-story, 252,420-square-foot building of stone and glass. Located in the downtown area, the $123 million project opened three years and three months since breaking ground in 2009.

Sitting on the site of the old Shell building, the new facility features eight courtrooms and chambers for 10 judges, compared to the four courtrooms and four chambers at the old Eighth Street location. Additionally, the new courthouse features a massive piece of artwork composed by a German artist estimated at around $1 million.

“This is the courthouse of the future. The entire building is run by computer—the lights, the temperature, everything,” Judge Sparks told KVUE News. The publication adds that the entire building is filled with natural light due to its long windows. Construction, which began in September 2009, is being funded by the American Recovery and Reinvestment Act, notes the Austin-American Statesman.

In other interesting news, the new $304 million Apple campus is starting to take shape with what appears to be a three-story office building, announced the Statesman. Estimated to create about 3,600 local jobs, the Apple project will be developed in two phases and is due for completion at the end of 2021.

According to a revised engineering plan, the entire project will have seven buildings, more than 1 million square feet of space and three parking structures providing 5,500 parking spaces.

Photo rendering of the new federal courthouse in Austin, courtesy of Texas Society of Architects

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340 Luxury Apartments to be Built on South Lamar

By Camelia Bulea, Associate Editor

South Lamar Boulevard is swarming with construction projects that will add circa 1,300 new apartments and more than 100,000 square feet of restaurants and shops south of downtown. One of these projects is developed by Hanover Co., which is expected to soon break ground on a luxury apartment project just south of the popular Uchi restaurant.

According to the Austin-American Statesman, the first units will be ready by late spring of 2014, with the project due to be completed in the fall of 2014. The luxury multifamily project will also include a clubhouse with a fitness center, Wi-Fi lounge, entertainment areas, two movie theaters and private dining and conference rooms.

Monthly rates will range between $1,900 and $2,000, and units will feature stainless steel appliances, wood flooring, granite counters and 10-foot ceilings, as well as walk-in showers and balconies in select units. David Ott, regional development partner with Hanover, also adds that the average size unit will be 875 square feet.

The Houston-based multifamily developer is very interested in Austin and especially South Lamar area, as it considers it to become an even more urban and mixed-use version of South Congress. Ott added that Austin has shown high demand for new housing projects, the apartment market being the region’s strongest real estate sector.

Still, he believes the appetite for new development in Austin is tightening up, so any projects that are not under construction or starting soon might be delayed or cancelled, as quoted by the Statesman.

Hanover is also the developer of the Ashton, an apartment high-rise downtown at Colorado and West Second Streets, and a total of 2,764 apartment units in Central Texas and San Antonio.

Photo rendering of Hanover Rice Village in Houston, courtesy of Hanover Co.

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Velocis Buys Two Austin Shopping Centers in $60M Deal

By Camelia Bulea, Associate Editor

Dallas-based Velocis, a commercial real estate investment fund, recently purchased two Austin shopping centers totaling over 350,000 square feet of retail space. With the acquisition of West Woods Shopping Center and Springdale Shopping Center, Velocis now has circa $160 million of assets under management.

The investor paid a total of $60 million for the two retail properties, which are considered to be strong assets in its portfolio and representative of their strategy to build a portfolio of properties in high-demand markets, said Steve Lipscomb, a Velocis principal and co-founder.

West Woods Shopping Center is located in the heart of two upscale neighborhoods, serving residents living in West Lake Hills and Rollingwood. The 189,340-square-foot center is over 97 percent leased with an impressive list of national tenants, among which are brands like Stein Mart, Michaels, Petco and CVS. It is considered to be one of the city’s iconic retail properties.

Springdale Shopping Center is located in proximity of the new Mueller Airport Redevelopment. The 163,677-square-foot retail property is anchored by names like H-E-B, Fashion Outlet, Carousel Pediatrics, Family Dollar and O’Reilly Auto Parts. The fund also owns The Jefferson in Austin, a 97,552 square-foot medical office building the company purchased in March 2011.

Velocis is well positioned to continue snapping up just the right assets in key locations. According to Commercial Property Executive, the fund completed its second closing in June, taking it one step closer to the goal of raising $150 million in equity for leveraged buying power totaling $350 million.

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Los Angeles Company Buys 2,044-unit Riata Apartment Complex in Northwest Austin

By Camelia Bulea, Associate Editor

Los Angeles-based IMT Capital LLC, along with affiliate IMT Residential, has made its largest acquisition ever, closing a deal on the 2,044-unit Riata apartment complex. The deal represents one of the largest apartment portfolios ever sold in Austin, according to the Austin Business Journal.

The portfolio had been on the market since July, when news broke that CBRE Group Inc. was chosen to list the property on behalf of Hunt Investment Management—a division of the Texas-based Hunt Cos. empire.

Located near State Highway 183 and Riata Trace Parkway in Northwest Austin, the Riata portfolio includes eight distinct gated apartment communities. The complex was very attractive for the buyer, especially for its amenities, including an 11,000-square-foot athletic club and fitness facility, nine pools and hot tubs, racquetball and basketball courts, a jogging park, pet park, game rooms, and business centers.

The new owner was also drawn by Austin’s economic growth and the large number of investors. A good example is Apple’s $300 million investment in a new campus, which is expected to add circa 3,600 employees. The new campus will be located in the same corridor as the master-planned community of which the Riata portfolio is a part, reports the Community Impact Newspaper.

IMT Capital also owns four other properties in Austin: IMT Wells Branch, IMT Rattan Creek, IMT Anderson Mill and IMT Monterey Ranch. The company owns 70 properties with more than 21,375 units throughout Arizona, California, Florida and Texas.

Photo courtesy of www.facebook.com/RiataApartments

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