Austin Real Estate Development -
2nd Quarter 2007.

Austin Market Overview

SUMMER SALES STRONG IN AUSTIN (Austin Business Journal) The average sales price increased 6.64% in June to $254,211. This compares to $238,378 in June, 2006. New listings were down in June by 15.63%, and Solds decreased by 3.27%.

AUSTIN AND TEXAS SURPASS NATIONAL HOME APPRECIATION RATE (Texas A&M Real Estate Center) – Home prices in Texas increased 6.8% during first quarter 2007, well above the 4.3% national average. Among the state’s large metro areas, Austin and San Antonio are seeing the strongest rate increases, at more than 10 percent.

“There’s no reason prices shouldn't continue to rise despite the increase in foreclosures and the slowdown in transactions, construction and new home starts”, says Texas Real Estate Center’s Chief Economist, Mark Dotzour.

AUSTIN AND TEXAS EMPLOYMENT STILL STRONG (Real Estate Center) – Texas nonfarm employment rose 2.3% from May 2006 to May 2007, compared with 1.4% for the U.S. Austin-Round Rock ranked third in job creation and posted an employment growth rate of more than 3%

AUSTIN IN TOP TEN FOR GROWTH ( Houston Business Journal) – Texas' five major cities — Houston, San Antonio, Dallas, Austin and Fort Worth — were among the top ten in the nation for population growth from 2005 to 2006, according to a U.S. Census Bureau report.

TEXAS A RETIREMENT HOT SPOT TEXAS (The Dallas Morning News) – According to the North Carolina Center for Creative Retirement, Texas has passed Arizona and California to become the second hottest retirement spot for Americans. Texas, which was the number four destination based on 2000 data, attracted 6.8 percent of America's migrant retirees in 2005, up from 4.8 percent in 2000. Experts attribute the rise to good weather and Texas low cost of living.

Residential

HIGH DENSITY COMMUNITY NEAR UT AUSTIN (Austin American-Statesman) – A local developer is planning a $500 million mixed-use development on the 22-acre Concordia University site. East Avenue Investment Group will build a more than 2.7 million-square-foot high-density community. Plans currently call for 1,450 residential units, 545,000 square feet of commercial space and a 250-room luxury hotel. East Avenue will pay for the preservation and creation of several parks in surrounding neighborhoods.

CENTEX'S THIRD HARRIS BRANCH COMMUNITY AUSTIN (Austin Business Journal) – The Austin division of Dallas-based Centex Homes Corp. has purchased 135 acres for the final single-family parcel within the 2,200-acre Harris Branch master-planned development, which already has about 1,100 single-family homes. Fully built out, the project which is near Parmer Lane and the new SH 130 toll road will contain single-family, multifamily, industrial, office and retail uses.

TANGLEWOOD WEST SOLD Houston Income Properties Inc., a private investor and condo converter has purchased Tanglewood West, in Austin's Tarrytown area. Built in 1966, the 62-unit complex off Norwalk Lane has units averaging 704 square feet. The average rent is 94 cents per square foot. The Austin-based buyer paid more than $80,000 per unit at just over a 5 percent cap rate.

GOOD CARMA AUSTIN (Austin Business Journal) – An almost 2,500-acre mixed-use development the size of a small town is planned near Austin-Bergstrom International Airport. Carma Texas plans to break ground in 2009 on the $500 million master-planned community, which is bordered by US 183 to the east and McKinney Falls Parkway to the west. Carma plans to include approximately 3,500 multifamily units, 2,000 small-lot urban-style houses; and about 5,500 single-family homes. More than 140 acres will be set aside for parks and a trail system.

Commercial and Retail

NEW MIXED-USE FOR BEE CAVE – A Dallas-based joint venture purchased 17 acres to build the $30 million, 150,000-square-foot lifestyle center, Village at Central Park. The project at RR 620 and Hwy. 71 will be predominantly retail but will include office and restaurant space. Bed, Bath & Beyond has already been signed. Construction is slated to wrap in mid-2008.

BOOST FOR WOMEN'S HEALTH (Austin American-Statesman) – St. David's HealthCare System will invest more than $100 million in women’s health services for the city’s north side. The system’s investment includes a new $82.7 million hospital off MoPac Boulevard south of Parmer Lane that will more than double the capacity for women’s surgeries, baby deliveries and newborn intensive care. About 100 jobs will be created in the center's first year.

HOLLYWOOD: TRAVIS COUNTY STYLE AUSTIN – With the goal of making Central Texas the next Hollywood, phase one of the $1.5 billion, 681-acre, mixed-use Villa Muse will break ground by summer in the Texas 130 corridor of eastern Travis County. The first phase will consist of the 200-acre, $125 million Villa Muse Studios, which will include a 50,000-square-foot soundstage, recording studios, a scoring stage and a 70,000-seat amphitheater.

BLOCK 21 GETTING 'MAGIC' TOUCH (Austin American-Statesman) – Ervin "Magic" Johnson and his private equity fund, Canyon-Johnson Urban Fund, are investing $50 million in a $260 million project that could transform a vacant downtown block. Plans for Block 21, which is being developed by Austin-based Stratus Properties Inc., include an upscale 250-room W hotel and 200 luxury condominiums in a 35-story tower, plus new homes for the Austin Children's Museum and KLRU's acclaimed "Austin City Limits" music program. Prices for the condos will range from about $400,000 to more than $3 million.

RENOVATIONS ROCKING MUSIC HALL AUSTIN (Austin American-Statesman) – Renovations have begun on the Austin Music Hall at 208 Nueces St. The $5 million renovation will update the building's exterior, expand seating capacity to 4,000, add a full-service restaurant and improve the acoustics. Grand reopening is slated for October.

 Northern Travis and Williamson County

WELLNESS CENTER WORK BEGUN (Austin Business Journal) – Kinsman Ventures LLC of Plano has begun work on a new 160,000-square-foot medical and professional office building near Seton Medical Center Williamson and Scott and White's new hospital. Round Rock Wellness Center, on the southwest quadrant of University Boulevard and Sunrise Road, will include an ambulatory surgical center and diagnostic center. Office suites will range from 1,200 to 20,000 square feet. Completion is slated for spring 2008.

ALL ABOARD! (Austin Business Journal) – Capital Metro's commuter rail has officially opened its first Central Texas station. While the train is not yet running, the park-and-ride area can be used by bus riders. The commuter rail system will open in 2008 and run along a 32-mile route. "Capital Metro's commuter trains will be vital to the development of a transportation-rich Leander over the next decade," said Mayor John Cowman.