Kanye West Purchasing Austin Loft? Perhaps, But Not The Austonian Penthouse

The Austonian

I love to see effective guerrilla marketing in action.

Earlier this month it seemed as if every Austinite on twitter was sharing rumors that hip-hop fashionista Kanye West purchased the top floor of the Austonian. Skeptical, as is my nature, I was doubtful – I had just toured the top floors. The Austonian is the furthest you’ll get from a proper “Austin loft“. The rumor propagated with Kanye’s lyric “New crib-LOFT IN- where its at-AUSTIN-where is that-Texas!!!”

I was scratching my head, and thinking “really?”. Pushing down my gullible pride, I bashfully confirmed with the Austonian. The rumor, of course, is 100% false, but it resulted in discussion and intrigue. This was cunning guerrilla marketing. :-)

Think about it. Eventually, perhaps this year, a buyer will emerge for the Austonian penthouse. There are a handful of buyers that have their eye on this space, but are biding their time, waiting to see if the fierce competition among the luxury towers will further soften prices across the board. These towers are already negotiating, very discretely, behind closed doors. But, for the buyer that has their eye on a product with no substitutes, one day soon, they could wake up to real news that what they desire is no longer available.

Below, I’m reposting a comment I shared in another thread

Jude Galligan wrote:

The current market for these buildings [Spring, W, Four Seasons, Austonian] works like this: There are buyers right now paying for a specific view, or floorplan, or the flexibility of combining units. We’re negotiating hard, and seeing deals with 10-15% discounts from asking. More or less depending on the specific space and the buyer’s desire for customizations. At this level, buyers often just want a shell space and the ability to bring their architect into the discussion. There are other buyers waiting patiently for better negotiating posture in a softer market – they are less concerned about having a specific space.

Until each building receives a certificate of occupancy, and we can observe the velocity of closings on the existing contracts, it’s challenging to gauge a market for a product that Austin is unfamiliar with (i.e. luxury urban condos).

I don’t expect they will sell out before they open, unless they soften their prices in a blanket fashion come springtime. However, I don’t expect you will see auctions (with the possible exception of the attainably priced Sabine) as the financing for the Austonian, W, and Spring give them a couple of years from construction completion before they need to repay the debt.

Grapevine stories:
http://austinist.com/2009/11/04/kanye_probably_wont_be_at_the_runwa.php
http://modernmanmusic.wordpress.com/2009/04/13/gotta-loft-inaustin

Reltated posts about penthouse living:
http://downtownaustinblog.org/2009/10/09/pros-and-cons-of-living-on-the-top-floor/
http://downtownaustinblog.org/2009/06/12/the-downtown-austin-penthouse-part-one-economics/

About Jude Galligan

Jude Galligan, Broker-Owner of REATX and publisher of Downtown Austin Blog (aka. "DAB"), spends his time matching remarkable people with remarkable properties in Austin’s urban core. A resident owner in downtown Austin, Jude serves on the Board of the Downtown Austin Alliance (DAA) and the City of Austin Downtown Commission. Contact Jude.

Comments

  1. I have it on good information that Kanye will only buy a unit that Taylor Swift has put an LOI on.

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