As far as I know, there aren’t currently any Cuban restaurant concepts in downtown Austin proper. Well, there WASN’T before this week, anyway. There’s a new one popping up in the warehouse district, where the now defunct Stack Burger Bar used to be (one of the restaurant concepts owned by the now infamous Yassine Enterprises).
Looks like FLOR will be opening in downtown Austin’s 2nd Street District (209 W 2nd to be exact, where Mercury Design Studio was – they’ve now moved 2 doors down).
They’ll be opening a day before SXSW 2013 starts, just in time for the crazy crowds. We suspect they’ll do well in the area with DWR and Mercury Design Studio nearby – as well as several high-end downtown austin condos and apartment buildings, and look forward to doing a little shopping there ourselves.
The Railyard condos are unique. The two low-rise buildings sit on two of the best sites in downtown Austin, and have usually been more affordable than the newer, sexier high-rises. Part of the appeal is location: situated across from the Austin Convention Center, 100 feet from the MetroRail, one block from Congress Avenue, three blocks from competing luxury towers, the Austonian and Four Seasons. The Railyard has enviable proximity to most anything in downtown Austin.
Remember last year’s NIMBY fury over Austin’s Short Term Rental ordinance (pdf)?
You would be in good company if you assumed that all of downtown Austin’s condos and apartments were making money on STRs.
You would be wrong, though.
Downtown condos have home owners associations (HOAs). HOAs have rules, and in downtown Austin those rules are usually antagonistic to short term rentals. Breaking those rules could result in a $1000 per day fine by the HOAs. Despite the fact that the STR ordinance does not regulate apartments and condominiums, last year’s fight with the City of Austin to regulate STRs wasn’t going to impact most of us living in downtown because of these HOA rules. [UPDATE: rules have been revised to cap STR permits in CBD multi-family buildings at 25%]
The Railyard condos are very, very unique.
This past November, just a month after Austin’s new Short Term Rental ordinance took effect, an enterprising Railyard owner recognized the Railyard’s bylaws did not forbid short term rentals and put together a fund to purchase several units.
The investment rationale is simple: opening up your condo as a vacation-rental-by-owner (aka. VRBO) during SXSW, ACL, F1 (just to name just the big opportunities, not to mention conventions) can yield more rent during those events than the total rent from a typical 12 month lease! Same for Railyard owner-occupants who can lease their place out for a few nights, take a vacation, and make a couple thousand bucks.
The economics of Railyard ownership shifted overnight. Word quickly spread to the owners and a handful of Austin Realtors. In the previous year (Nov 2011 – Nov 2012), 1bd/1ba units at the Railyard condos were trading at an average of $285/foot, and units with at least 2bd/2ba units were trading at an average of $275/foot. [UPDATE: one year after posting this article, the last recorded MLS sale at Railyard was a building record $415/foot]
Going forward, expect sale prices at the Railyard condos to be 20-25% more than last year, reflecting the new economics of embracing downtown short term rentals. Owner-occupants are getting in on the action, too.
Offering the flexibility to lease your condo on a short term basis is a privilege that makes the Railyard unique among downtown condos. This privilege has significant value.
STRs can be a win-win for owners and associations. The key is balance and monitoring the impact on residents.
The Railyard HOA is smart to approach STRs with reasonableness and attach fees to the process. These extra fees will help fund their operations, building improvements, and keep HOA dues low for homeowners. Homeowners, who are also able to capitalize on their property.
I’ll stop short of advocating that all downtown buildings should permit STRs – I don’t agree with that. However, there are several buildings that should be paying attention to what the Railyard is doing. It seems reasonable for more HOAs to experiment with loosening their STR rules, monitor the process, use the money for building improvements, and course correct as needed.
[updated 06/01/2014: It has been discovered that Brazos Place Condos at 8th Street & Brazos Street is doing something similar by permitting one-month minimum lease terms.]
I have been honored to have served on the host committee for Goodwill Industries of Central Texas’ 2012 Ghoulwill Ball event, being held at The W Hotel in downtown Austin tomorrow evening. Helping promote a very worthy cause (GICT’s mission is to generate lifelong connections to work) has been rewarding. All proceeds of this event will go to GICT. Free food, free drinks, a killer DJ, at one of the swankiest downtown hot-spots, AND you get to dress up in a Halloween costume. I couldn’t think of a better time!
And, if you live in The Residences at The W – you can literally just stumble home after the party.
Buy your tickets here.
[Personal update why we've not published data for a while. A couple of months ago, I began work on obtaining sales data from the newly constructed buildings. Not a quick and easy task. However, after several conversations and a leap of faith by everyone involved in assembling the data (thanks!), we've got some REALLY interesting data to share. --Jude]
Back in 2010, when downtown Austin’s luxury condos started closing, the actual sales prices were closely guarded (not entered into the MLS). I’ve been publishing monthly sales of Downtown Austin condos for years, and began tracking sales of new construction condos by laboriously tracking new deed records. That data was [at least] an accurate count of how many new constructions units had closed, and what floor plans were selling best. That was real data my clients could rely upon, but actual closing prices were simply not available.
As a result, I have only been able to consistently highlight resale pricing. With all of my talk about the average sale price for downtown is solidly planted at $300 per foot, I would always qualify it as incomplete without closing price data for new condos.
My goal has always been to combine the resale numbers and the new construction numbers into a single statistic. The closely guarded luxury condo sales data has kept me from doing that.
Until now… [Read more...]
In April, I didn’t publish a transaction summary covering March’s downtown deals.
I had assembled all the info, drafted the post, and it was ready to publish. Some of you noticed that I never got around to posting it, and I’m sorry for not getting it out there (here’s to you John K.).
Jude, why u no post March data?
First and fortunately, I was at the tipping point of having more business than I could handle. Springtime is always busy for me. Combine that with opening the RE/MAX Downtown Austin office and I got distracted, operating on little sleep.
Secondly, I couldn’t come up with a headline for March! March’s data didn’t seem to have a compelling story. March’s data seemed too predictable. That spooked me – what was I going to write about? DAB readers have built up filters to exaggerated headlines, but readers do expect a story. You should expect some insight. What’s the story?
Judging by the average numbers, November was a rough month for resales of downtown Austin condos. Conversely, luxury condos continue to post strong numbers for the second month in a row. Back in October, I was surprised by the large number of closings we observed in the downtown Austin’s top-tier condo buildings. The ABJ followed up with a story saying “Verdict’s in: Austin condos did work.”
Top-tier (new buildings)
While the high-end market continues to show good numbers, it’s not clear to me how many of these closings are from original reservations, rather than new purchase contracts (within the past 120 days).
-Four Seasons shows 49 closed units, six closed in November.
-Austonian shows 32 closed units, two closed in November.
-Spring shows ~165-170 closed units closed, nine closed in November. It should be noted that these were, in fact, all new contracts.
Using data available on Nov 30th, 11 downtown austin condos closed at an average $252 per square foot. That’s the lowest average price since August of 2009, and is 19.5% lower than the average resale price compared to November of last year. Compared to downtown condo sales in October, prices were down 14%. Also interesting, average days-on-market (DOM) was 118 days – not surprising to see closing prices averaging 12% less than original asking prices.
November Downtown Austin Condo Sales
|Address||Building||Bedrooms||Square Feet||Sold Price|
|1800 Lavaca St #608||Greenwood Towers||2||857||Call|
|507 Sabine St #305||The Sabine||2||1462||Call|
|505 W 7th St #318||Posada del Rey||2||1049||Call|
|901 W 9th St #311||The Nokonah||1||849||Call|
|360 Nueces St #1001||360 Condos||1||801||Call|
|555 E 5th St #923||5 Fifty Five (555)||1||1195||Call|
|1705 Pearl St||3||1879||Call|
|1801 Lavaca St #14M||Cambridge Towers||2||912||Call|
|411 Brazos St #224||Brazos Lofts||1||1313||Call|
|800 W 5th St #505||Austin City Lofts||2||1482||Call|
|80 Red River St #307||Villas on Town Lake||1||675||Call|
A new site plan has been submitted to the city by developers Mike McGinnis and Rick Hardin for a new 70 unit downtown Austin apartment building. Called the “Bremond,” the name is clear a nod to its unique proximity to the Bremond Block Historic District. The 0.41 acre site, if built, would use the address 807 Nueces St. The written application calls for 12 stories, four to be used for parking. There is no retail component, which is not surprising given the area.
The site is currently an asphalt parking lot.
Check out the rendering. Note, none of the buildings along 8th will be razed. The development will not need any variances or public hearings.