Austin Real Estate Development -
3rd Quarter 2007.

Austin Market Overview

AUSTIN MARKET STILL HEALTHY AUSTIN ( Austin Business Journal) Pending sales in August were down 24 percent from a year earlier. Homes priced below $200,000, which make up more than half of the Central Texas market, were down 16.7 percent in the area. However, home prices continued to rise, with the median up 6 percent from a year ago to $192,200.

Experts said the rising values in Central Texas are a combination of home appreciations, more home sales in expensive categories and higher home-building costs. Real estate experts remain optimistic about the market because Central Texas continues to have healthy job growth, with the lowest August unemployment rate in six years. Austin's steadily increasing population also is keeping a solid demand for housing.

TEXAS FORECLOSURE RATES DOWN COLLEGE STATION (Real Estate Center, RealtyTrac Inc.) – Foreclosure rates may be on the rise, but recent information from RealtyTrac Inc. shows Texas MSAs were not among the top ten foreclosure areas in the United States for the first half of 2007. “The decline in filings and properties with filings reflects the continued steady increase in Texas residential property values, the continued stable economy and employment and the fact that Texas did not rely on extreme, exotic loan terms to the same extent as other, higher-priced markets,” said Dr. Jim Gaines, research economist with the Real Estate Center at Texas A&M University.

BOOMERS WATCHING AUSTIN (AARP The Magazine) – Texas' capital city has landed on the list of the top four "retirement-friendly" cities to watch, according to AARP The Magazine. Features that make a community livable, such as mass-transit systems, expanded sidewalks, better healthcare and a wide range of mixed-use housing, were among the criteria for determining the magazine’s list of five great places to live. According to the magazine, that age group is estimated to grow by 32 percent in the next 15 years.

Residential

SPRING ON THE WAY AUSTIN (Austin American-Statesman) – Work has started on the 42-story Spring condominium tower at Third and Bowie. The building will have nearly 250 units. One-bedroom condos, at 575 square feet each, will start at $237,000, while the two-bedroom, two-bath units will range from $430,000 to $530,000.

APARTMENTS UNDERGO CONDO CONVERSION AUSTIN (Austin Business Journal) – The 52-unit Windsong apartment at 2703 Swisher Street and the 18-unit Parkside at 4209 Burnet Road were purchased and will be turned into condos.

HINES EYES LAKE TRAVIS LAGO VISTA (Austin Business Journal) – Hines Interests LPhas purchased 875 acres in Lago Vista between FM 1431 and Lake Travis. The plan is to turn the property into an upscale residential development that could include about 2,000 homes.

TUSCAN TASTE, GREEN SPACE BEE CAVE (Austin American-Statesman) – Tennessee-based Southern Land Co. will break ground next month on a $160 million, 78 acre Tuscany-style residential development that will include 28 acres of green space. Cielo, near RM 620 and SH 71, will have 400 luxury flats, condominiums and townhomes.

REDEVELOPMENT AT BULL CREEK, KINGSWOOD AUSTIN (Transwestern) – Atlanta-based Post Properties and local firm Ardent Residential have secured almost an acre for redevelopment. The partnership bought Bull Creek Townhomes, the 140-unit residential community at 4320 Bull Creek Rd., and neighboring Kingswood Apartments, the 32-unit complex at 4318 Bull Creek Rd.

Commercial and Retail

UPSCALE HYATT HOTEL COMING , AUSTIN (Austin American-Statesman) The transformation of the 23 acre Concordia University campus into a $750 million major mixed-use development will include a high-end, 17-story hotel, 150 condominium project, shops and offices. The project will be one of the tallest, densest projects outside the downtown.

AUSTIN CHILDREN’S MUSEUM NOT PART OF BLOCK 21, AUSTIN (Austin American-Statesman) -Museum officials say they've decided not to exercise an option to be a part of the high-profile development Stratus Properties Inc. plans to build on the block just north of City Hall, saying the museum's and Stratus' needs didn't mesh.

OAKHILL OFFICE COMPLEX, AUSTIN (Austin American-Statesman) A three-story office building with 30,000 square feet will be located about a half-mile from the intersection of Texas 71 and U.S. 290. It is near Seton Southwest Hospital and Advanced Micro Devices Inc.'s new Lone Star campus.

MIXED-USE ARBORETUM UNDER DEVELOPMENT AUSTIN (Austin American-Statesman) – Arboretum Park, a mixed-use community, at 9707 Anderson Mill Rd is under development and will include retail and office space housed in three one-story buildings totaling about 18,000 square feet. Arboretum Park will also have a gated community of 39 garden homes.

OFFICING AT LANTANA AUSTIN (Austin Business Journal) – Locally based Stratus Properties Inc. will begin construction later this year on two three-story, Class-A office buildings at Lantana, a 500-acre mixed-use development. The project will total 180,000 square feet and is expected to cost more than $36 million. Construction should be completed late next year.

 Leasing

Industrial Leasing LOW (grubb-ellis.com) – Net absorption in the city’s industrial leasing market this second quarter was over 2.6 million square feet, according to Grubb & Ellis’ second quarter Industrial Market Trends survey. The overall vacancy rate in the over 68.4 million-square-foot industrial sector fell by 90 basis points to 7.3 percent, the lowest level recorded in seven years.

OFFICE ABSORPTION CONTINUES CLIMB, VACANCY SLIGHTLY UP AUSTIN (grubb-ellis.com) –The office leasing market, which totals more than 39.2 million square feet, recorded its sixth consecutive quarter of positive growth, pushing the year-to-date absorption level to 600,811 square feet, according to Grubb & Ellis' second quarter Office Market Trends report. Despite the quarterly absorption gain, Austin’s overall vacancy ended the quarter 20 basis points higher at 11.5 percent.

MUELLER MULTIFAMILY DEVELOPMENT UNDERWAY AUSTIN (globest.com) – Construction has begun on the first multifamily development at the former Robert Mueller Municipal Airport. Mosaic at Mueller is a $45 million, 440,000-square-foot complex with 442 apartment units ranging from 580 to 1,750 square feet. Monthly rents will range from $850 to $2,500, with 10 percent of the units available to low-income renters. Facilities will include swimming pools, a clubroom, fitness center and a business center..

CLASS-B BALCONES SOLD AUSTIN (globest.com) – A Los Angeles-based investment group has purchased the 312-unit Balcones Club Apartments from Equity Residential Properties Trust. The buyer plans to renovate the 23-year-old, Class-B complex that sits on nearly 13 acres at 9218 Balcones Club Dr.

PRESSLER COMPLEX SLATED AUSTIN (Capital City Partners, globest.com) – Gables Residential. will build Pressler, a 165-unit apartment complex featuring 26,000 square feet of ground-floor retail space on two acres at the northeast corner of Fifth and Pressler Streets in the city’s West End. Construction on the $35 million mixed-use project begins next month. The residential component will consist of one- and two-bedroom units ranging from 900 to 1,000 square feet. Move-in is scheduled for late next year.