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Windfall – Villas on Town Lake is being sold

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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?

Villas on Town Lake
Villas on Town Lake

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

Signals of progress at Waller Park Place

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Small signals are often precursors of BIG news.

This past weekend, fencing was observed being erected around the site of Waller Park Place, the largest private development ever proposed in downtown Austin.  Demolition permits were issued back in August for the vacant structures along Red River Street.  The new fencing is a sure sign that site prep is about to begin.

The 3 acre site in the Rainey Street District stretches from Cesar Chavez to Davis Street, hugging the eastern bank of Waller Creek along the way.

-Jude

waller-park-place-demolition-signal2

waller-park-place-demolition-signal1

 

The Sabine Street Promenade: Don’t Call It A Comeback

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The Sabine Street Promenade project — between Fourth St. and Seventh St. — has always been a rough jewel I’ve been waiting to see cut. The project will transform a parked-car-congested design dinosaur from the 1980s into a modern, landscaped, walk/cycle through-way.

I’ve been a strong advocate of the project from day one.  Now, there are signals of progress behind the scenes.

Not only will the Sabine Street redevelopment be a great public space, but it will also create great connectivity along the Waller Creek redevelopment.

sabine street promenade

First approved back in 2011, the pace of urban progress is never a fast one, but we’ve finally got our first actual look at the layout between 4th and 6th Streets of the pedestrian/bikeway corridor.

It is still unclear when the redevelopment would take place, but the initial plan was sometime this year. It’s not uncommon for massive infrastructure projects to get delayed for one reason or another. Even still, those who spends time downtown, especially nearby residents at the 5 Fifty Five, Avenue Lofts, or The Sabine, should be excited to see it move from concept to an engineer’s plan.

sabine-street-promenade1

Based on the road redevelopment plans, submitted by the City of Austin last month, it looks like the nuts and bolts of traffic flow remains unchanged from what was announced a few years ago.

Back in 2012, city officials were quoted in the newspaper saying 60 percent of the corridor would be devoted to bikeways, sidewalks, and trees. The corridor will still have on-street parking — which is not a surprise — but drastically less than now.

The Sabine Street redevelopment runs parallel to the Waller Creek Corridor, and adjacent to a portion called “The Narrows” which will be focused on outdoor socializing, rather than transportation. (Think San Antonio Riverwalk but less campy.)

In 2013, the City Council picked Michael Van Valkenburgh Associates (MVVA) as the lead consultant for the Sabine Street project, which makes sense given that MVVA is the lead designer for Waller Creek.

Personally, I’m hoping the promenade has some MVVA flare, versus coming out a cookie-cutter image of other redeveloped downtown Austin streets. (Don’t get me wrong, I love cookies even if they are cookie-cut. I’m just saying, MVVA bring a lot to the table).

Waller Creek is envisioned as a chain of parks in the heart of Downtown Austin. Sabine Street will connect an envisioned year-round event park to the north (Refuge) and a reinvigorated Palm Park to the south.

sabine-street-promenade2

If you look at the architectural drawings below, you also notice the promenade is going to be enhanced by a good dose of trees, which are noted by the triangle symbols, and other shrub beds on the north side.

-Jude

sabine-street-promenade3

Downtown Austin News Bites

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Signs of Progress for Waller Park Place

An application to re-subdivide the lots at 92-98 Red River, 504-505 Willow St., and 503 and 511 E Cesar Chavez was filed recently.  We’re eager to see Waller Park Place break ground.  This is notable as the largest private development ever proposed in downtown Austin, and when complete will be bring more daytime activity for the burgeoning Rainey Street District.

Bed & Breakfast Proposed for 1304 Rio Grande

A bed & breakfast concept could potentially breathe a little new life into a district of downtown mostly filled with older homes hosting small offices. Very little info exists on the project right now, but we’ll update you as we get additional details.

A Walk in the Clouds in Downtown Austin

No, this isn’t the 2015 Downtown Austin Blog Prom Theme.  It’s another way of saying that downtown Austin is getting another really cool sky bridge concept, a la Fairmont to the Austin Convention Center.

Rendering of skybridge that will connect Fairmont to Austin Convention Center
Rendering of skybridge that will connect Fairmont to Austin Convention Center

This time, the “aerial right-of-way encroachment” (sky bridge is catchier, admittedly), is being proposed between West 5th and West 6th Street on Bowie street, and will connect slick new Bowie Apartments  Shoal Creek Walk (Class A office and ground floor retail, by Schlosser Development) to Whole Foods Headquarters, a development that has just started site work.

Per developer, this was REQUIRED by city code, since at least one of the buildings it will be connecting are in the flood plain.  An additional escape route was required to avoid a fire hazard. It’s our understanding that this concept is a go – as the time for objections has passed, and it’s a safety requirement.  We think it’s kind of neat.

location-of-bowie-skybridge-downtown-austin-real-estate

Millenium Rainey Restaurant Space Available for $36/sf NNN

Speaking of Rainey Street Happenings, the marketing for the commercial space at Millenium Rainey Apartments is in full force.  CBRE is marketing the property – take a look at the marketing packet they created:

(Click on the images for a larger view)

First Crane for Aspen Heights Apartments at 8th and Nueces

It’s alive!  Aspen Heights Apartments moving forward with construction, as evidenced by the massive crane recently erected on the site.

 

Visiting Seattle

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Jude and I like to travel in December, and we recently took our annual winter trip.  This year’s trip began in Seattle, WA. Neither of us had ever been to Seattle before, and were pleasantly surprised at the cultural similarities that the two cities have, while also, in my opinion, having very different “feeling” downtown areas.  Naturally, we began comparing the two downtowns, and while Austin is doing a lot of things right within the urban-core to make it one of the most desirable places in the country to live, downtown Seattle is also doing a lot of things right, and is anchored by beautiful natural scenery. Our City leadership can look to Seattle in terms of continuing to optimize Austin’s potential, notably their [troubled] effort to tear down the Alaskan Way Viaduct, a hideous highway separating the city from the bay.

 

Seattle-skyline

But, before I begin really comparing, I think it would be a good idea to start with some historical facts / population stats for both cities:

Population of downtown area:
Austin: around 10,000 (Downtown Austin Alliance), close to 1% of Austin’s total population
Seattle: around 60,000, close to 10% of Seattle’s total population (Downtown Seattle Association)

Public  / Communal Transportation:
Austin: CapMetro Buses, Red Line Commuter Rail, Taxis, BikeShare, Uber, Lyft, Car2Go, ZipCar
Seattle: Metro Buses, Ferry, Seattle Center Monorail, Seattle Streetcar, Link Light Rail, Taxi, Uber, Lyft, Car2Go, ZipCar

Public Market:
Austin: Sunday Farmer’s market in Republic Square park
Seattle: Pike Place Public Market, a permanent installment open 7 days a week

Size of downtown area:
Austin: 9 districts, approximately 1.5 square miles overall (.005 of total size of Austin)
Seattle: 12 distinct neighborhoods, approximately 4 square miles overall (.03 of total size of Austin)

Population Growth:
Austin and Seattle are the two fastest growing cities in the nation.

Notable Corporate HQs:
Austin: Whole Foods, HomeAway, GSD&M
Seattle: Amazon.com, Tableau, Starbucks

starbucks-logo-seattle
The original and, ahem, more anatomically correct Starbucks logo that you see much more prevalently in Seattle

The most interesting of these statistics, to me, is that the relative size and population of downtown Seattle to the overall city is a much higher percentage than with Austin.  One way of interpreting that fact is to say that downtown is a bigger part of the total Seattle experience, and I have a feeling policy and funding follow suit (which brings more dollars and more vibrancy back into their downtown to flow out to the rest of their city).  However, I would say that most people in Austin realize that downtown IS the city’s cultural center and a must see / do.   I think all Austinites can continue to keep that perspective top of mind while encouraging continued growth in our urban core – realizing that a vibrant and engaging downtown brings benefit to the entire city.

However, despite their difference in scope – downtown Seattle and downtown Austin do have similarities. For instance, where downtown Seattle has graceful Gulls, whose calls evoke the sounds of the calming sea that traces the edges of Seattle’s downtown,…downtown Austin has Grackles.  (Okay, so Seattle wins that one.) Where downtown Seattle has insane hills that are the stuff of sleigh-riders dreams, downtown Austin has a gentle southeastern slope that makes outdoor activities a dream. Downtown Seattle has the Needle, downtown Austin has … the Austonian.  Downtown Seattle has a crazy Gum Wall, downtown Austin (well, close to downtown) has a graffiti wall (Hope Outdoor Gallery).

The examples above are a little in jest – but I will say that the culture of downtown Seattle did, in fact, feel pretty similar to downtown Austin.  For one, the city is very dog friendly.  Dogs were everywhere.  Additionally, many of the restaurants and night-life spots in downtown Seattle could have just as well been in Austin.

The natural surroundings, however, could not have been more different.  There were mountains viewable from downtown Seattle, as well as an active ocean port.  The weather is very rainy and generally much colder than in Austin. Likely, because of the weather (and maybe the hills), I did not see NEARLY as many folks jogging or bicycling around downtown Seattle, where in Austin, that’s the definite norm. One thing that REALLY struck me is that downtown Seattle and downtown Austin are very close to the same age, both “founded” in the mid-1800s. Downtown Seattle had a broader historic feel, but Austin is simply effervescent with youth and new growth.

The public transportation was robust and almost effortless (at least to us) in Seattle.  Also, downtown Seattle had more shopping – department stores and mom and pop shops happily co-exist in downtown Seattle.

Nordstrom Rack right next to the Monorail
Nordstrom Rack right next to the Monorail

Additionally, and this is a very timely issue for Austin, but busking in Seattle certainly felt MUCH more professional than what I see in downtown Austin…here’s one of the many talented street performers sprinkled around downtown Seattle. It’s important to note that Seattle has some very lax regulations on busking, however. In Austin, I think it should be monitored and systemized more than it is, and stakeholders like DANA agree (the City is currently obtaining more stakeholder feedback before re-presenting their proposal on busking regulations).

Now, it may sound like I just think Seattle is the greatest thing since sliced bread and why don’t I just marry Seattle because I love it so much….but, it’s not like that.  I LOVE downtown Austin, I really do. I believe we are a relatively “new” downtown (in the modern sense) and an incredibly fast growing one, at that. And the opportunities that brings for those of us in on the ground floor of this burgeoning downtown are incredible. And it only benefits us to look to more established downtown centers across the country and take what we can from those that have done it before.  City leaders and policy influencers are already doing this, of course – but it never hurts to keep it top of mind.

And, I think it’s important to note that more isn’t ALWAYS better.  For instance, the amount of vagrancy in downtown Seattle was frankly overwhelming.  Austin certainly has vagrancy issues as well, but, at least, anecdotally, Seattle felt FAR worse. And, there’s controversy as to whether Seattle is really doing their best to solve the problem in a sustainable way.

From searching a few online sources, Seattle’s cost of living seems quite a bit higher than Austin’s.  Most online source quotes that housing is at least 25% higher in Seattle than in Austin. This figure does not compare the downtown areas specifically, but I would think there is some disparity there.

In the last 90 days, downtown Austin’s median sold pricing is observed to be $490 per foot.  Semi-reliable online sources quote a recent median sales price for downtown Seattle the last 90 days at around $475 per foot.  So, if this is accurate, it may be that downtown Austin, is in fact, the more expensive housing market, at least at this specific point in time.  One reason for that may be the relatively lower inventory.

I think looking to Seattle can really help those that are shaping the new downtown Austin – especially in terms of public transportation, the city’s relationship with its natural surroundings (the Waller Creek redevelopment and Shoal Creek Conservancy efforts certainly are on the right track), and the SCOPE of downtown in relation to the size of the overall city: encourage vertical development in the urban-core, in order to preserve the beauty of our hill-country.

One thing is clear, Austin is a fabulous place to live – and it’s sunny.  Seattle can keep all that cloudy gloom for itself.

Handful of This Week’s Downtown Austin Events (and one on the East Side)

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DANA Urban Core Happy Hour
Sunday, November 16, 2014 – 2pm-4pm
Hotel Ella

RSVP Required.

hotel-ella

DANA members and guests are invited to enjoy the hospitality of the recently revamped Hotel Ella.

On the menu:

  • Truffle Risotto Cakes
    Crab Cakes with Lemon Aioli
    Chorizo stuffed bacon wrapped dates with piquillo pepper sauce
    Antipasta Buffet Bar with imported cheese, house cured meats, preserved local fruits, and peppered flatbread with assorted crackers

+ complimentary beer, wine, and cocktails!

Creek Show, Light Night
Thursday, November 13, 2014 – Sunset ’til Late
Waller Creek (between 5th street and 7th street)

Event website.

"Flow" installation, Design Workshop
“Flow” installation, Design Workshop

As the sun sets on Waller Creek, five site-specific light installations will be revealed. These installations, all created by Austin-based architects and landscape architects, will illuminate Waller Creek in new and exciting ways. See the designs, hear local music and learn more about the future of Waller Creek.

East Austin Studio Tour
2 Weekends: November 15-16, November 22-23 – 11am-6pm
Various locations

Event website.

hallie

Big Medium presents the 13th East Austin Studio Tour! EAST is a free, annual, self-guided art event occurring over two weekends in November, providing the public with an opportunity to meet the makers: the local artists and artisans who leave a lasting imprint on Austin’s vibrant, dynamic culture. Tour-goers are invited to discover new artistic talent, see working studios, learn about artists’ tools, techniques, and inspirations, and explore unique exhibition spaces and local businesses.

One of the artists we love to support, Hallie Rae Ward, will be showcasing her work at Createscape Coworking.  Check it out!

Austin Fairmont Hotel To Break Ground November 3rd

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Some people, myself included, were beginning to think downtown Austin’s Fairmont Hotel was becoming development vaporware.  Back in March there was proof-of-life when they began fencing off the site.

Today, according to a press release sent to DAB, the Fairmont Austin, the first hotel providing direct access to the Austin Convention Center, is announcing that it has secured financing and will break ground on November 3, 2014.

Colony Capital has stepped in with project financing for the $370 million luxury hotel, which is expected to open June 3, 2017.

The site, located at the northeast corner of Cesar Chavez & Red River is a 1.74-acre parcel situated along the bank of Waller Creek. The hotel will be notable for having a direct connection to the Austin Convention Center, via an arial promenade being designed by Thomas Phifer and Partners (the firm selected by the Waller Creek Conservancy to develop a master plan for the Waller Creek district).

The finished building will no doubt add to downtown Austin’s skyline. At 595 feet tall, it will be second tallest structure in downtown Austin – the tallest being the 56 story, 680-foot Austonian.

Summary of what we know about the Fairmont Hotel…

  • Number of rooms = 1,066
  • Number of stories = 37
  • Square Feet = 1.4 million
  • Building Height = 595 feet
  • Delivery = June 2017

-Jude

Fairmont_Rendering_Oct2014_final
Fairmont Hotel, Red River @ Cesar Chavez, southwest POV

Why It’s Bull****: The Waller Creek Tunnel Inlet Is Too Tall

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Had the weekend to catch up on some old news, and this issue of the Waller Creek Tunnel inlet being too tall smelled foolish from the first I heard about it.

Kudos to the Statesman’s Sarah Coppola for the revealing a potential $45mm fix to reduce the height of the Waller Creek Tunnel Inlet would be wasted money since the Texas State Library and Archives Commission is already blocking the view.

Say what?! That’s right. “Fixing” the inlet structure to be fully compliant with the CVC will not regain any view! An existing government building is blocking the view already.

The Waller Creek Tunnel Inlet is under construction in Waterloo Park. This is the business end of the tunnel construction which was on target for completion in mid-2015.

It was almost two years when the tunnel’s under ground dig was passing beneath the Sabine.

I remain optimistic that elected officials at the local and state level will apply reason, rather than force the taxpayers to pay to bring the inlet into CVC “compliance.”

source: Statesman.com

Downtown Austin Goes For The Goal – and the Gold!

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If you haven’t yet read this week’s edition of The Austin Chronicle – and seen the amazing front page photo/rendering – please check it out at once here! Stupendous reporting by Senior News Editor, Michael King, of breaking news regarding a multi-billion dollar plan to build a Major League Soccer (MLS) stadium in the middle of Lady Bird Lake, coupled with the new Light Rail line running straight through the center of the stadium as the train crosses the river.

[Read more…] about Downtown Austin Goes For The Goal – and the Gold!