Downtown Austin lofts, condos, apartments

Windfall – Villas on Town Lake is being sold

Jude Galligan | June 22, 2016 |

Downtown Austin’s Villas on Town Lake condos home owners’ association (HOA) will agree to sell the entire property – comprised of 57 individually owned condos – to The Sutton Company, who beat out a handful of bidders. More than one source close to the deal has rumored the amount of the offers [plural] were in the ballpark of $50,000,000.

This is exceptionally interesting because we normally expect to see development activity on surface parking lots, or on an assemblage of adjacent parcels. The Villas is a fully occupied condominium! This means there are multiple owners, strong personalities, and diverse motivations. Corralling everyone into agreement is a herculean task.

What’s so special about the Villas?

Situated along Waller Creek, the Villas on Town Lake condominium is one of downtown Austin’s older mid-rise residential buildings. Villas is a modest, courtyard-style, community, built long before the Rainey Street neighborhood became a “district.”

Most importantly, Villas On Town Lake is coveted for its location.

The site is one of downtown Austin’s most desirable. With only city-owned park land between it and Lady Bird Lake, if Villas were to be razed and rebuilt as a tower, it would deliver views of the lake and hill country, with adjacent access to Waller Creek, Lady Bird Lake, and the hike & bike trail. The site is not encumbered by Capitol View Corridors and has CBD zoning.

Villas vitals:

Located at 80 Red River Street, Austin, TX 78701
Built in 1982
Number of units = 57
Total Square Feet (private, conditioned) = 65,791
Total Square Feet (including Common) = 99,770
Average unit size = 1,154 ft
80% of air-conditioned area = 52,631.2 ft (appox: 46 units)
80% of Total Area = 79,816 ft

How does this happen?

Property rights in Texas are such that a condominium association can dissolve itself. When this happens ownership reverts to a single parcel with tenancy in common, and proceeds from a hypothetical sale are distributed based on percentage of ownership. The HOA can sign deeds of units that have not volunteered to sell.

(I welcome comments from real estate attorneys who can shed light on the mechanics of this.)

Years ago the Villas HOA had the foresight to realize the market would eventually grow to a point where the modest condo community was no longer the best use of the land. In 2006, the Villas HOA revised their bylaws to allow 80 percent of the Villas ownership could vote to dissolve the entire HOA. This change paved the way for a deep pocketed buyer to buy the whole shebang with only 80% of the owners needing to agree.

In September of last year, the Villas HOA issued a Request for Proposals from development groups. Groups like World Class Capital are rumored to have been among the bidders. The winning bidder, The Sutton Company, is one of Austin’s most prolific developers, responsible for several downtown Austin condo projects, including: Plaza Lofts, Avenue Lofts, Brazos Lofts, and the 5 Fifty Five. They also assembled the land for the Millennium Rainey, and are developing the land adjacent to the Villas as Waller Park Place.

Is it a good deal?

Yes, it is, for both buyer and seller.

If the rumored $50,000,000 is close to the purchase price, then the average price per foot of “saleable” space is $759/ft!! Based on the average unit size, were someone to try and accumulate control of 46 units – the number I estimate required to gain 80% control of the Villas – would take approximately 14 years to do based on historic sales velocity.

Accelerating 14 years of effort requires offering a premium to market right now; however, the winning bidder also owns the adjacent property and can reasonably expect to recoup that premium.

Villas on Town Lake - History of Sales — Villas on Town Lake – History of Sales

Per the MLS, 63 units have sold at the Villas since the summer of 1997. In 1997, market price for a typical condo at Villas on Town Lake was ~$100 per foot. Now, imagine for a minute that you’re an owner at Villas back in 1997 and a someone approached you saying, “I will pay you double the market rate, $200 per foot!” Most reasonable people would agree to less than double the market rate from an unsolicited offer. If anyone wants to pay me twice market value for my place… I’m ready to talk!

The most recent sales record we have for a one bedroom at Villas was from March 2015, when a 675 sf condo sold for $279,000. So, if the rumored amount of the winning bid – $50,000,000 – is close to accurate and proceeds are distributed by square foot, then that same built-in-1982 Villas one-bedroom may be closing for $512,325. That’s a windfall.

Kudos to the Villas for getting it.

~ Jude

Fifth & West Residences: The Next Austin Condo Tower

Jude Galligan | October 14, 2014 |

The Statesman confirmed today what many of us have been expecting, the former offices of the Texas Press Association located at the corner of Fifth Street @ West Avenue, will be razed and construction to commence on a 39 story condominium.

Known officially as Fifth & West Residences, it is the first condo project in downtown Austin to reveal official plans to begin accepting reservations since Seaholm. Seaholm Condos is notable as it was announced almost exactly one year ago, and was fully reserved within just a few days of that announcement.

We first learned about Fifth & West earlier this year when the project came before the Downtown Commission, and we observed just how compact a footprint the building will have. So, maximizing FAR was crucial to developing the site. One of the more notable pieces the developer offered for density bonuses was subsidized Car2Go, B-Cycle, and Shoal Creek Conservancy memberships for each residence. It is to be determined if those commitments carried through the entitlement process.

Interior dog park

residence interior

building entrance

view from east

view from north

[Interior renderings by Michael Hsu Office of Architecture]

Tall and slender (think Spring Condos) because of the property’s small foot print, combined with the the impact of the Capitol View Corridor, the building’s architecture will be a unique triangular tower, with the longest plane facing southeast. The surrounding businesses, notably Austin Urban Vet, Kung-Fu Saloon, Jerry Kunz design, and Molotov, will remain untouched by the vertical development.

Below is a summary of what we know about Fifth & West Residences:

Project name = Fifth + West Residences
Address = 501 West Avenue, Austin, TX 78701
Project type = condominium
Number of residences = ~154
Target pricing = ~$740 per foot, on average
Building height = 448ft
Unit sizes = average of 1,624 sf (1, 2, 3 bedroom plans)
Developer = Riverside Resources
FAR = ~20:1
Architect = GDA Architects (Interior Michael Hsu)
Anticipated delivery = Autumn of 2017

It’s interesting to see how a large Capitol View Corridor impacts vertical development, forcing architects and developers to finesse the building envelope.

Pre-sales process will be announced soon. Until then, if you’re interested in making a reservation, contact us for more details!

-Jude

Comparison of GDA Architect's rendering to what the corner of 5th & West looks like today — Comparison of GDA Architect’s rendering to what the corner of 5th & West looks like today

Development Team Closes On Block 1

Jude Galligan | February 5, 2014 |

According to a City of Austin release, representatives with the City’s Economic Development and the project development team closed on the GWTP property (aka “Block 1) on January 31st. The development team is Trammell Crow, the Hanover Company, and Pacific Life Insurance.

Block 1 is a pivotal downtown waterfront development. It will improve connectivity with Second Street through to Nueces Street, the new Central Library, and the Seaholm District.

Summary of what we know about Block 1:

Located at Cesar Chavez and San Antonio Street.
Total project size is approximately 1.7 million square feet of mixed use development.
Block 1 totals 1.776 acres of land
38 floor three-tiered mixed-use tower
expect 440 apartments, including 50 affordable units
40,000 square feet of office and retail space.

The residential component is still being referred to as apartments for rent, and given Hanover’s participation we’ll take that at face value. (Hanover developed the Ashton). We should see site work commence in February with public streets and utility work, including the extension of Second Street.

Back in August we caught a glimpse of what Block 1 tower could look like. According to today’s release, the development team continues to signal it will be a 38 story building with a three-tier design, which is consistent with the rendering and elevations we’ve seen.

If you look at the downtown skyline from the south (78704), you’ll notice there’s a giant gap in the skyline between the AMLI on 2nd to the east and 360 Condos to the west. This project should fill that gap nicely.

More importantly, the walkable connectivity this project brings cannot be understated. It’s literally creating more “grid” and that’s perhaps the greatest upside this project can deliver to city-dwellers.

-Jude

South and East Elevation Drawings for Block 1 by Solomon Cordwell Buenz (SCB)

Trinity Tower: Planning a 39 Story, 350 Unit Highrise

Jude Galligan | November 12, 2013 |

Last year we discovered planning efforts for an apartment tower with the working name of “Trinity Place.” The forlorn metal building on the corner of Trinity and Cesar Chavez was acquired by World Class Capital Group.

Since then, there hasn’t been a peep out of the site leaving many of us wondering what would happen there. We’ve now discovered some proof-of-life based on public records filed by the engineering team.

99trinity_current2 — corner of Trinity @ Cesar Chavez

The name “Trinity Place” has been scrapped, it is now dubbed “99 Trinity Tower” and is being proposed as a mixed-use residential skyscraper seven stories taller than the neighboring Four Season Residences.

The applicant is proposing a 39-story tower with ~14,000 square feet of restaurant on the ground level. Those are unchanged specs from last year. Above that, the first 8 floors will be dedicated for parking, with the remaining floors being dedicated to about 350 residential units.

Even with the Lakeside Apartments to the south, the structured parking garage will allow clear lake views for most of the residential units above.

The project is proposing Great Streets standards along Trinity St., and to build a hike and bike trail to connect to the existing Lady Bird Lake Trail.

While we know what is being proposed, it still remains to be seen if it will come to fruition in the end. The applicant is trying to nail down the base floor-to-area ratio (FAR) provided by the zoning, and navigate restrictions within the Waterfront Overlay “North Shore Central” district and will have to wait for the city, which could take some time if history serves as a guide.

The ball is rolling on this site. The demolition permit was issued to scrape the dilapidated metal structure for whatever lands there. We are excited to see more.

***Below, DAB has mocked up a building envelope showing [extremely crudely!] how a 39 story building could fit onto the site, and how it would add to downtown Austin skyline.

99trinity_massing_crude — a crude massing by DAB of how a 39 story building would fit on the 99 Trinity site

99trinity_massing_crude2 — At 39 stories, the tower would be taller than the neighboring Four Seasons Residences

A Glimpse Of What Block 1 (Green Water) Will Look Like

Jude Galligan | August 15, 2013 |

It’s been a long time coming for the $500MM Green Water Treatment Plant redevelopment, situated along Cesar Chavez, bounded to the west by Shoal Creek, and to the east by Silicon Labs. We’ve stumbled upon good reason to be excited that development could begin soon.

Back in May, when a site plan application was submitted to the city, we shared with you that the first phase of the new Green Water development – a residential highrise known simply as Block 1 – was moving from possibility to reality.

greenwaterorientation — Block 1 is the NW corner of Cesar Chavez @ San Antonio Street

But I, along with nearly everyone else, was kind of confused about what exactly was being planned and how close the Green Water vision was going to match the original vision after a tree preservation snafu at City Council. This has been resolved and the plan is to incorporate the trees into the design.

Updated elevation drawings were submitted to the city which show a building that steps back from Cesar Chavez.

We can expect that the first phase will be a 38 40-story mixed use building with a total of 446 units. Majority one-bedroom, but included efficiencies, two-bedrooms and three-bedrooms, ranging from about 450 square feet to 2,000. It is anticipated these will be apartments (for rent).

greenwaterelevations — South and East Elevation Drawings for Block 1 by Solomon Cordwell Buenz (SCB)

At street level, we should see 14,000 square feet of retail, 15,000 square feet of restaurant space, and another 23,000 of office space.

The project is being developed by Trammell Crow and designed by Solomon Cordwell Buenz (SCB), an award winning architecture, interior design and planning firm with offices in Chicago and San Francisco, who has some very classy buildings all over the world.

If you spend some time perusing SCB’s design portfolio, I think you can start to feel some excited anticipation for this on the Austin skyline. No doubt, numerous tourists and passers by of what has become a fenced off lawn have wondered just what is going there.

While we can now see the profile the development, we eagerly anticipate some updated renderings.

9th Annual Downtown Living Tour – May 19th, 2013 – Reserve Your Tickets

AG | May 5, 2013 |

The 9th Annual Downtown Living Tour is a couple of weeks away. Produced by the Downtown Austin Neighborhood Association (DANA), the tour is a great way to tour downtown living, at your own pace, all in one day!

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This year, although the tour will still be self-guided, the tour will also have shuttle service to facilitate access to each tour stop (nice!), and will showcase the following buildings:

The Whitley Apartments
The Shore Condos
Park West Residences
360 Condos
Avenue Lofts (one of the few Art Deco buildings downtown)
The Four Seasons Residences -RECEPTION – (VIP only, and only open from 4pm-5pm)
Brazos Lofts (check out the history, formerly Capital Chevrolet)
Towers of Town Lake (Penthouse, VIP only, only open from 1-4pm)
Capital Studios (to-be-built Foundations Communities project designed by Dick Clark Architecture)
LBJ’s apartment at JJ Pickle Building (VIP only, only open from 1-4pm)
More stops to be announced!

There are some stops of particular note, primarily the official office suite of President Lyndon Baines Johnson at the JJ Pickle Building, an office suite he used during his presidency and the site of such landmark meetings as the Cold War discussions on December 6, 1966, which culminated in the first agreement with the Soviet Union to limit nuclear weapons, known as the Strategic Arms Limitation Treaty (SALT).

The JJ Pickle building itself is part of a two-block complex of Federal Buildings in downtown Austin, and was designed by Texas Firms Page-Southerland-Page and Brooks & Barr, and is textbook 1960s high-rise design.

Here are a few exclusive pictures of the interior of the office suite, which is remarkably intact.

The LBJ Suite is only open to VIP ticket holders, and there a very limited amount of VIP tickets – so we would recommend…

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More Downtown Austin Apartment & Condo Projects Emerging

Jude Galligan | February 19, 2013 |

It seems like almost every direction we look around downtown Austin, construction cranes are deployed, helping concrete and steel skeletons reach to the sky. Notably the JW Marriott hotel, across from the Austonian, has three cranes in place and will soon take shape. But that’s just the newly visible construction: in and around downtown Austin there’s upwards of 8 million square feet of construction planned or underway.

Sometimes we forget to look outside of the downtown core. Still, there on the far wings of downtown Austin, even more construction is (literally) on the horizon and DAB is here to give you a first look.

North Shore Lofts
More Rainey Street District development is on the way, joining the Sutton Towers, Austin Skyhouse and the (perpetually-stalled) Hotel Van Zandt. Not much is known at this point, but a new multifamily development is planned on a vacant plot of land on the north shore, next to the Holiday Inn right by I-35.

If built, the views of Lady Bird Lake would be incredible (and protected).

This site, addressed 16 North I-35, was rezoned from downtown mixed-use (DMU) to central business district (CBD) in 2005, and at the time was owned by Tom Calhoon, of Calhoon Properties.

Coming Soon: "North Shore Lofts" — Coming Soon: “North Shore Lofts”

West Campus Apartments
Don’t be fooled by the name, this project, at 17th and Guadalupe is not actually in “West Campus“, and is also planned to have condos. Since as long as I can remember, this area near the Dog and Duck Pub, is one of the most run-down areas remaining in downtown, with a lot of properties sitting idly in disrepair.

Last time this site was anything productive it was an Arby’s.

Hopefully, this project will spur additional redevelopment of the low-density legacy buildings all around here. A few blocks north, the UT School of Business is building a new center next to the Player’s Club, which will also expand the AT&T Conference center, which might help energize the area, too.

-Jude

1715 gdlp current — Coming Soon: “West Campus Apartments”

BREAKING: Sales Of New Downtown Austin Condos Average More Than $1,000,000

Jude Galligan | January 8, 2013 |

For the first time, the average sales price of a new condo in downtown Austin is more than $1,000,000.

It’s not news that residences cost more than $1,000,000. It is news when we’re talking about averages! To be clear, we are focusing on new construction only, not resales (which have also had a banner year, and we’ll cover that in a future post.)

In 2012, the Austonian, Four Seasons Residences, W Hotel Residences, and Spring Condos (which in 2012 closed out their sales), accounted for 124 sales.

According to builder reports assembled by Capitol Market Research for new construction condos sold during the past 12 months:

average price = $1,061,682
average size = 1,701 ft.
number new condos sold = 124

The data is provided to us monthly as an aggregate of the above four buildings. Anonymizing individual building sales was the only way to convince the developers to share their sales data. To qualify the average price, we can approximate a median price using the 12 monthly aggregate records we have.

median monthly average price = $1,044,181 (min $777,813 to max $1,687,857)

The refrain which began in 2010 continues: there are no new downtown Austin condos being built. Nor have we seen any new site plans for downtown condos. Inventories continue to decrease (by 124 units in 2012) and residences are selling quickly at prices close to the asking price. An ancillary effect of this shrinking inventory is rising prices for resales.

By my estimation, when compared against TCAD records, only 115 new construction units remain. If interest rates remain low, the downtown Austin real estate market is on a trajectory to complete sales of new construction condos in 2013.

I’ll continue to provide detailed analysis of 2012 results over the coming weeks, including resales and analysis of building-by-building performance.

-Jude

Marathon Planning Effort Pays Off: 7 Rio Site Plan Permitted, Awaiting Construction

Jude Galligan | December 20, 2012 |

An Englishman once said: “You can’t always get what you want, but if you try sometimes, well you just might find you get what you need.”

And so it was for the folks behind a tower planned at Seventh & Rio Grande, named 7 Rio, who this month saw the City of Austin approve a site plan, allowing construction to move forward.

It was exactly one year ago that DAB posted that the 7 Rio apartments still had legs.

The project was one of a handful of [for sale] condo projects that took a back seat when lenders got squeamish in the midst of the Great Recession. In 2008, on the eve of the housing-crisis fallout, the builders projected a 3Q08 groundbreaking on a 34-story luxury residential 158-unit “point-tower” building.

That vision has been scaled back, and what is coming is a shorter building, with 24-stories, but packing in about 70 more apartments [for rent].

7rio-austin-site-rendering — original rendering of 7rio has since been scaled back

Part of the site is in the Capitol View Corridor, but a point-tower over podium design could have gone up as high as 50 stories. Given that demand remains so high for units in the urban core, this feels like a bit of a missed opportunity for CWS Capital Partners – the Orange County, California based developer – to create something striking, and the Austin community to reap some additional property tax and density.

One other observations is that the current site plan application says only “residential & parking,” while the initial proposal included 7,300 square feet of retail space.

I’m just hoping CWS doesn’t sacrifice developing an inviting, pedestrian/shopper friendly building, for something barren of storefronts.

It is nice to see a project developed by a great local architect Brett Rhode getting off the ground, and we’ll all accept that the client calls the shots. (Note: Rhode: Partners portfolio still shows specs for the first design.)

What’s Missing? Clues To Downtown Austin’s Next Apartment Tower

Jude Galligan | December 18, 2012 |

What’s missing is a clue to what might become downtown Austin’s next apartment high-rise.

Back in August we discovered the old warehouse on the corner of Trinity and Cesar Chavez had been acquired by World Class Capital Group, and quickly conceptualized into an apartment tower, with the working name of Trinity Place.

For decades, two small billboards stood at the eastern edge of the lot. If you were heading east or west on Cesar Chavez you wouldn’t have missed them. As of this week, those billboards have been taken down!

Now, WCCG would not decide to forfeit that steady billboard lease without a good reason. I speculate this is a signal that development efforts are progressing.