downtown Austin's real estate and neighborhood blog
If you’ve been downtown today, then you’ve likely noticed the myriad of film trucks parked from Whole Foods to Sabine. Robert Rodriguez is shooting his latest film Machete. Robert DeNiro has been spotted by residents of the Brazos Lofts watching from across the street.
HeadOfMetal has uploaded some photos to Flickr.
Cool!
Downtown Austin is largely defined by its districts, unique destinations bound by similar geography and form. As it exists today the Warehouse District has significance as a cool place to visit, but it’s debatable if it has historic significance. Capital view corridors, which place height restrictions throughout the much of downtown, are conspicuously absent over the Warehouse District and the low-slung properties are worth a fortune. This brings up the discussion of should the Warehouse District be protected by landmarking the buildings.
ROMA has come up with an interesting solution. Property owners inside the Warehouse District are incentivized to sell their surplus density/air rights. This would allow property owners to capture the value of their building’s entitlements without changing the streetscape. City Council is scheduled to vote on this solution, as part of a larger density bonus program, on August 20th.
Two of downtown Austin’s most active and respected stakeholders, Roger Cauvin and Michael McGill, have divergent opinions on what they would like to see happen. They have graciously agreed to share their perspectives which I will publish in two parts.
From Roger Cauvin:
“While the Warehouse District is currently a great asset for downtown, I believe it can be an even greater asset if the city facilitates, and doesn’t obstruct, its densification.
Some of the sentiment for preserving the character and height of the Warehouse District stems from a reflexive resistance to change. In almost every mature neighborhood in Austin, long-time residents develop a fondness for the existing character of their neighborhood and fear that changes will disturb what they value about it. And new developments with sprawling parking lots and unimaginative designs lend credence to these fears. Nevertheless, these citizens give little consideration to the possibility that change can lead to neighborhoods that are more walkable, more vibrant, and more charming over time.
Downtown has usually been the exception to this rule. Downtown residents have generally embraced height and density. But downtown is not immune to resistance to change. As someone who grew fond of entertainment in the Warehouse District in the 1990s and has lived a block away for more than seven years, I myself fear the unknown – what will happen to it if it densifies?
Fortunately, observing the reflexive resistance to change in other neighborhoods has given me perspective. I know that I must put aside my fear of the unknown and realize that increased height and density in the Warehouse District will likely make it and the rest of downtown even more vibrant and even more walkable than it currently is. A greater concentration of residents and workers in the Warehouse District will increase the demand for, and viability of, pedestrian-oriented retail all over downtown. It’s important to recognize that the charm of the Warehouse District comes not just from its modest height, but its pedestrian orientation.
Former Mayor Wynn had a vision of 25,000 residents living downtown. He saw that radically increasing the number of downtown residents would yield many benefits to the core and to Austin as a whole. The Warehouse District is one of the few areas of downtown unencumbered by Capitol View Corridors. Restricting its height and densification would severely impact the potential for increasing the number of residents downtown to realize Mayor Wynn’s vision. Erecting barriers in an effort to preserve the height of the Warehouse District not only comes dangerously close to the NIMBY mindset pervasive in other neighborhoods; it also undermines the larger downtown vision that many of us share.”
The Daily Texan is reporting that we can expect a major face on W 6th including a new hotel. “The hotel will be a first-class, garden-style, low-rise, contemporary boutique hotel”.
This past Sunday the Bel Air auction was hosted at the Hilton hotel. I was out of town, unfortunately, and was not able to record the winning bids. Keye reported 300+ attendees. All of the units had a winning bidder.
After Brazos Place, the Bel Air auction was the second high profile condo auction in Austin. There was some speculation in my office that the undisclosed reserve would be roughly 2/3 of the original price. My sources indicate that most of the winning bids were in the ballpark of 60% of the original list price, but these were all won “Sold Subject To Confirmation.”
Here is the shocker: Of the 25 units that were auctioned at the Bel Air condos, only two of the winning bids were accepted! The Seller/bank was still negotiating hours after the auction and many of the units may have added 5-10% on top of the winning bid [and on top of the 4% buyers premium] in order to meet the reserve minimum.
The auction rules clearly state that the Seller was allowed to set a reserve:
“All homes have an unpublished reserve price (Unpublished Reserve Price) which means that the seller has established an unpublished minimum selling price. The Starting Bid is not the reserve price. In order to become the winning bidder of a home, a bidder must have the highest bid and meet or exceed the unpublished reserve price. The highest bid is subject to acceptance by the seller (see ‘Subject to Confirmation’ section below). With respect to a high bid less than the seller’s reserve, the high bid and resulting purchase agreement/offer are subject to the seller’s acceptance, counter-offer or rejection during the auction, in the contract room, and/or within 3 days following the auction.”
The rules go on to state…
“With respect to a winning bid that is not immediately accepted by the seller, the auctioneer will inform the winning bidder that acceptance of their winning bid is ‘Sold Subject to Confirmation.’ The winning bidder acknowledges and agrees that winning bidder’s purchase/offer is subject to and contingent upon the seller approving the resulting purchase/offer, acceptance, counter-offer or rejection during the auction, in the contract room and/or within 3 days following the auction.”
Over the next couple of days we will see how the dust settles. Because it was behind closed doors we don’t know how many of the auctioned units actually went under contract nor where the final negotiated price ended up for those units. I wouldn’t be surprised if someone from the DAB readership was in attendance. If so, please share your experience in the comments! 🙂
If we can confirm the final negotiated prices, then it appears we can expect the average clearing price at Bel Air condos to be in line with what I’ve been suggesting: a 25-35% discount is the magic number for a developer to quickly unload condos in bulk, in either the open market or the auction market.
When the undisclosed reserve is set too far above what the market is expecting it can ruin the effectiveness of the auction. It’s situations like this that I suggest bidders bring a Realtor they trust – per the rules of the auction it cost bidders nothing – and they can help with strategy, understanding the project’s history, and negotiating when unexpected scenarios like this occur.
-Jude
Just found this article in the ABJ. Once $128MM in construction financing is spent, Stratus and Canyon-Johnson will need to find additional sources of capital. From a buyer’s perspective, I would want to see that financing in place before entering into a contract.
From StreetInsider.com
“The joint venture is aggressively pursuing other options for financing the future construction costs of the W Austin Hotel & Residences project after the required capital contributions are made. Such options may include additional equity contributions by Stratus and Canyon-Johnson, financing from other financial institutions, admitting new equity partners, or a combination of these alternatives. If the joint venture does not secure project financing from a third-party lender, or if Stratus or Canyon-Johnson is unable to make required additional future capital contributions to the joint venture, the joint venture may be required to delay further construction of the project until additional financing is available. “
-Jude
Capital Metro Main Administration Building
2910 East 5th St. [map]
12:00pm
“PUBLIC HEARING NOTICE
DATED: JULY 24, 2009
Capital Metro is proposing to eliminate the Downtown Dillo routes beginning October 5, 2009 (last day of service would be end of day Friday, October 2nd). Capital Metro Planning Staff will be available to speak directly with citizens regarding route or schedule issues. Citizens are encouraged to attend any of the following meetings or to contact Capital Metro Planning by e-mail or by calling 474-1200. The public may also call 385-0190 with comments. Persons with hearing impairments may call the TDD line at 385-5872. A sign language interpreter for persons with hearing impairments will be provided at the public hearing. ”
-Jude
Okay, this is not technically downtown, but it’s close enough. And I love a good deal…..
A little “Bird”ie just told me:
Birds was honored by Elle Magazine as one of the Top 100 Salons in the U.S.A. Birds is celebrating by taking half off all Ladybirds (normally $39, includes wash, cut & blowstyle) with the purchase of color (50+, appt. only). They’re also knocking 25% off all shampoo and conditioner products.
In addition, they’re throwing parties (FREE Bacardi) every Thursday of this month beginning tomorrow, August 6, from 5-8 p.m. at the SoCo shop (1902 S. Congress Avenue).
If you’re in need a haircut, consider the deal at Birds Barbershop.
East Austin Location:
1107 East 6th St.
Austin, TX 78702 (map)
Walk in or call ahead
512-457-0400
7 Days a Week
-AG
[youtube = http://www.youtube.com/watch?v=KH4Xq1qtgeQ]
Yesterday, I headed over to the nearly completed Gables Pressler apartments on W 5th Street. Located just a few blocks east of another new Gables development, 5th Street Commons, Pressler is being marketed as Gables most “green” project in Austin.
5th Street, west of Lamar, has evolved rapidly. In less than a year we’ve seen the addition of dozens of new retail shops filled with local businesses along with hundreds of new residents and pedestrians improving what had been nothing more than a wide boulevard that connected Mopac to Lamar.
Gables Pressler is named after Paul Pressler, proprietor of Pressler’s beer garden originally built where Gables stands today. The chronicle has a great article on turn of the century beer gardens and goes on to say about Pressler:
“Pressler’s Beer Garden was located between the river and West Pecan Street (Sixth Street) in Old West Austin. Built around a steam brewery started by Paul Pressler in the early 1870s, it operated for more than 30 years before being swallowed by residential development. Situated on what was then the western fringe of the city, its idyllic rural location made it the perfect spot for relaxing under live oaks with a frothy mug of beer. It had a concert hall that regularly hosted touring German singing and theatrical acts. The grounds around the concert hall were landscaped with curving walks, ornamental shrubbery, arbors, and a fountain. The extended grounds also featured a boating ramp, a shooting club, and an alligator pond.“
The location is what sells this place – it’s equidistant to West Lynn @ 12th as it is to Whole Foods or the running trails. There are 168 units made up of studios, 1bd, and 2bd units. The finishes are nice. There is an interior courtyard with a pool. The leasing agent informed me that they are offering three months free on a twelve month lease for all leases which commence by August 31st.
Pricing as of August 4th, 2009 (pdf)
Gables Pressler
507 Pressler St
Austin, Tx 78703
(map)
-Jude
Just found this column from Statesman’s Michael Barnes discussing what is [or isn’t] happening on E. 6th Street. This is a topic that Downtown Austin Blog is very familiar with. [part 1, part 2, part 3]. One thing is certain: Sixth Street needs help. The historic landmarked buildings have been neglected to the point of ruin. The crowds are becoming more violent. Drugs are available on nearly every corner and alley. The music has left and gone to Red River. There are millions in untapped tax revenues from a lack of services/goods for residents, visitors, and day time patrons in general.
-Jude
[youtube = http://www.youtube.com/watch?v=3j2ff1YydWE]
The auction of the Sage Condos will use a different system than the auction at Brazos Place or the Bel Air. Rather than auction each individual unit, the auctions are for the right to choose which unit you want. Everyone bids and the highest bidder gets to choose the unit he/she wants. The auctioneer repeats this process until 10 units are sold.
The different models necessitate different tactics. For instance, at the Brazos Place auction, a buyer was able to study the units they wanted and were only required to participate in the auctions for those specific units. Collectively, with only those interested in the same units, buyers would only participate in the auctions for those units. Conversely, the auction system being used at the Sage encourages all buyers to bid in every auction.
At the Sage, if I simply want the best deal – without regard to view, size, etc – then I am still competing with other buyers that DO want a premiere unit and are willing to bid more to win the right to choose that unit. It is hard to say if this would encourage or discourage me from bidding. This system should clear out the premiere units early. Most likely, those that want the choice of premiere units will bid early and aggressively. Those that want the best deal at the Sage will bid in subsequent auctions once the premiere units are absorbed.
It remains to be seen if the bidding system used at the Sage will be of greater benefit to the Seller by encouraging more bidders and higher bids.
The Bel Air auction is this Sunday. The Sage auction is a couple of weeks from now.
-Jude
[Update from local auctioneer, Mike Hanley: “This is called the Multi Parcel Auction Method. It can be very effective! I have seen it used at Sheldon Good Auctions of Condos in Dallas,a Tranzon-Hanley Auction in Wimberly and have used it myself for the sale of undeveloped land in Utah and New Mexico.”]
