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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