Austin is known for making lists, typically garnering the top spots. However, in a recent National Apartment Index, Austin dropped from 15th to 18th. According to Austin Business Journal article, the index measures economic and supply and demand variables for the upcoming year. Some of the factors include employment growth, vacancy rates, construction rates, housing affordability and rents. Though job growth should continue to be strong, some 11,500 units will be completed this year, about double last year’s additions. Vacancy rates should climb, but that isn’t likely to result in rent decreases. In fact, Marcus & Millichap estimates that rents in Austin will rise 4.6 percent to an average of $1,065 per month. Last year, rents climbed about 5.7 percent. The demand for housing is clear by the number of construction projects. Take a short ride around downtown and the eastside and you will see the explosive nature of apartment complexes and condos alone. Kammie Russell’s Austin Sucks: Don’t Move Here infographic and the Don’t Move Here campaign aren’t working. It’s quite alright because real estate professionals welcome the influx of new residents with open arms. The index isn’t really putting Austin’s apartment sector in any danger. It’s just noteworthy when Austin doesn’t make a list- golf clap.
I met up with VP of Development at AMLI Marcy Phillips at the Bisnow Multifamily Summit. AMLI is one of the largest developers of multifamily properties in the country. Marcy explained their building strategy is to find the very best demand locations and build high quality, luxury properties that command the highest rent rates. Locations like downtown Austin have been very successful for them. One of their business strategies is to build and hold for 7 to 10 years, before selling. This makes sense, as after year 10 properties start need a bit higher maintenance overhead and fix-up. Austin, she noted has had a run-up on construction and labor costs in the last year by 15% to 20% or more, compared to Dallas and other Texas cities. Austin’s occupancy rates are the best in Texas but construction costs have increased substantially. Currently, AMLI has seven locations in Austin. What is your multifamily business strategy?
Great weather and festivals abound all make Austin a steady awesome place to live for those fortunate to call themselves Austinites and that includes commercial real estate. The Austin skyline has had steady additions of scaffolding and cranes. Multi-family vacancy rates are holding steady. All is holding steady according The GlobeSt.’s post of Hendricks-Berkadia’s Q3 multifamily report.
Austin is booming and ranks #1 on another list of fastest growing US cities based on population growth, job creation and exports. It’s no surprise to Austinites but the expected $100 billion mark is quite revealing considering the average person isn’t focused on the GDP of the economy. Bragging rights? Sure, why not. However, these numbers illustrate the vitality of the Austin economy and Texas as well.
Brian Kelsey of Civic Analytics has interesting insight on the matter.
Austin Business Journal’s Jan Buccholz reports Steadfast Income REIT of Irvine, California purchased the 502-unit Monterone at Steiner Ranch for $80 M, approximate break down of $159,363 for each unit. It will now be branded Meritage of Steiner Ranch. With a 93% occupancy rate, current and prospective residents can expect $4M in property upgrades.
Meritage of Steiner Ranch, located at 4500 Steiner Ranch Blvd., will be the third purchase in the Austin-metro area. The company also owns Montecito (I-35/Woodward) and Montelena in Round Rock.
This Austin Business Journal article ranked Austin again at #1 as the strongest local economy in the United States. The index measures relatives vitality of 102 major markets with populations of 500,000 or more. The private sector jobs in Austin grew by 10.1 percent. The unemployment rate remains low at 5.4%. The retail sector employment has jumped 9.2% since 2008, which is the largest increase anywhere in the country. On a side note, we are seeing a large amount of relocation here and housing demand is strong. Most properties that are priced well and in good locations are receiving multiple offers now.
Featured Apartment Building For Sale: 2450 Cromwell Circle
- Apartment Building in Foreclosure just minutes from Downtown Austin
- Located off of Riverside, near I-35
- 238 units total on about 10 acres
- Composed of mostly 2 story buildings, with some 3 story – 186,000 total square feet
- For details and to see video of property visit: http://www.austinapartmentsforsale.com/