October 2007
SIZZLE SLOWING, STILL SIMMERING
Austin ( Austin American-Statesman ) – Although August is typically a top-selling month, existing home sales were down more than 10 percent from a year ago, according to a report by the Austin Board of Realtors.
There were 9,819 homes on the market, 21 percent more than a year ago and a four-year high.
Homes priced below $200,000, which represent more than half of the Central Texas market, experienced the biggest slowdown at 16.7 percent. Sales were also down a significant 7 percent for homes priced from $200,000 to $399,999.
Pending sales in August were down 24 percent from a year earlier.
The year-over-year median home price rose 6 percent to $192,200. The average number of days on the market was 58.
“All we're seeing is a maturing of the market," said Mark Sprague, Austin partner of Residential Strategies, which tracks and forecasts real estate trends. "It's not as great as it was last year, but it's still a great market."
The area's August unemployment rate was the lowest in six years.
ROUND TWO FOR GAMING GIANT
AUSTIN ( Austin American-Statesman ) – After closing its local operations in 2004, the world's biggest video game publisher is moving back to the Capital City .
Electronic Arts Inc. is buying BioWare Corp. and Pandemic Studios from private equity firm Elevation Partners for $825 million. The price includes $620 million in cash, while the rest is in employee equity and stock options. Combined, the studios have 800 employees in Los Angeles , Austin , Canada and Australia .
The Austin gaming industry employs 1,100 people, most of whom work in small, locally owned studios. The biggest employer is NCSoft Corp. BioWare's local studio employs 60 people and is headed by industry veterans Gordon Walton and Rich Vogel.
AUSTIN OFFICE MARKET STRONG
AUSTIN ( Austin American-Statesman , Austin Business Journal ) – Third quarter rents continued to rise in the Capital City while occupancies held steady, new figures from Oxford Commercial show.
- Rents for Class-A office space averaged $29.84 per square foot, up from $25.15 a year ago. Occupancy was at 88.3 percent, down slightly from 88.4 percent a year ago.
- Occupancy among all classes was at 86.2 percent, down from 86.6 a year ago. Rents rose to $25.37, up from $21.62 a year ago.
- Companies leased more than 245,000 square feet of office space during the third quarter, up from almost 36,000 square feet in the previous quarter.
- The top three submarkets in terms of absorption were Far Northwest (more than 82,500 square feet) North Central (more than 65,500) and Northwest (more than 34,500).
- The industrial sector absorbed just over 454,000 square feet in the third quarter, a decline from the more than 594,700 square feet taken in the second quarter. Total occupancy stands at 91.5 percent.
THE PEEK OF LUXURY
AUSTIN ( Austin Business Journal ) – Peek-Howe Real Estate Inc. of Louisiana is developing a 256-unit luxury apartment project at 305 East Yager Ln.
White Rock at Canyon Ridge will feature an indoor sports court, workout facility, wireless business center, resort pool and garages.
Peek-Howe subsidiary PHL Construction is handling construction. Humphreys & Partners Architects LP of Dallas designed the project.
The apartment community is close to Dell Inc.'s headquarters. Completion is slated for fall of next year.
CENTRAL TEXAS RETAIL SURGE
AUSTIN–ROUND ROCK ( Austin American-Statesman ) – Three shopping centers are opening this month, bringing about two million square feet of new retail space to Central Texas.
Endeavor's University Oaks in Round Rock recently opened the first phase of its 625,000-square-foot development at University Boulevard and I-35. Phase one includes the county's first stand-alone JCPenney.
Cedar Park 's 1890 Ranch, also from Endeavor, will have its grand opening Sunday. The 530,000-square-foot first phase is anchored by a SuperTarget. Other tenants include PetSmart, OfficeMax, Circuit City and a 12-screen Cinemark. When completed, the project will have up to 900,000 square feet on 90 acres and will include an Academy and Gold's Gym.
Opus West Corp.'s 1.3 million-square-foot Hill Country Galleria in Bee Cave will have its grand opening Oct. 24.
GLOBAL HYATT'S PERSONAL STYLE
AUSTIN ( Austin American-Statesman ) – Global Hyatt Corp. and developer East Avenue Investment Group LP will build a 210-room luxury Andaz hotel in the Concordia University campus redevelopment .
Andaz means "personal style" and is a new upscale concept designed by Global Hyatt. The first Andaz is opening in London next month.
The energy-efficient, 17-story hotel, expected to open in 2010, will have a spa, fitness center and a 20,000-square-foot park-like roof with a cocktail lounge and restaurant offering organic food. The hotel will include 150 condominiums. The condos will range between 800 and 2,700 square feet. Prices start in the $400,000s.
East Avenue is redeveloping the 23-acre campus near I-35 and 32nd Street into a $750 million, high-density, mixed-use community. Plans include 600,000 square feet of office space, 325,000 square feet of retail and 1,450 condominiums.
Concordia University is relocating in 2009 to the former Schlumberger Ltd. business campus off RM 620.
WATERSTONE RIPPLING LAKE TRAVIS
AUSTIN ( Austin Business Journal ) – Construction has begun on Waterstone, a $27 million condominium project within the master-planned Waterford on Lake Travis .
The 71-unit development off Lohman's Ford Road in Lago Vista will feature two- and three-bedroom condominiums ranging from 1,400 to 1,800 square feet. The units are priced from $400,000 to $600,000.
Dallas-based Winston Capital Corp. is developing the project with equity partner Realty Capital Partners. PageSoutherlandPage LLP is the architect of record. Texas Capital Bank provided the financing.
H-E-B REMODELING OLD ALBERTSON'S
AUSTIN ( Austin American-Statesman ) – H.E. Butt Grocery Company (H-E-B) will remodel three Albertson's grocery stores, adding new departments and services and up to 150 jobs.
In early November, San Antonio–based H-E-B will begin renovating the stores on Gattis School Road in Round Rock, in West Lake Hills and on Research Boulevard and Spicewood Springs Road in northwest Austin .
The West Lake Hills store will be gutted and reopened with a sushi bar, an area for cooking demonstrations and a Central Market Cafe on the Run, which offers prepared meals to go.
With the new stores, H-E-B will have 45 stores in Central Texas , about 8,000 employees and an annual payroll of about $250 million.
H-E-B expects to offer jobs to many of the 350 Albertson's employees and plans to hire another 100 to 150 people to staff the three converted stores.
H-E-B has about 60 percent of Central Texas ' grocery market, followed by Wal-Mart with 23 percent and Randalls with 7 percent.
CAN-DO SPIRIT BRINGS EXPANSION
AUSTIN ( Austin Business Journal ) – The Travis Association for the Blind (TAB) has preleased just over 119,000 square feet at the under-construction second building in Southpark Commerce Center IV.
The expansion will triple the size of TAB's manufacturing operations. The nonprofit will continue operations at its existing 67,000-square-foot facility on Business Center Drive .
Established in 1934 to give the legally blind work opportunities, TAB's first products were brooms and mops for the government and military. Currently, TAB manufactures a wide range of clothing accessories for the military, the State of Texas and other customers. About 75 percent of the more than 175 employees are legally blind.
Transwestern Austin expects to complete the three-building, fourth phase of Southpark Commerce Center IV this fall. The project includes about 417,400 square feet of industrial flex and bulk warehouse space.
Transwestern was self-represented. The David Petrick Co. represented TAB.
VINTAGE PICKS PECAN
AUSTIN ( Austin Business Journal ) – Vintage Interests LP has purchased the more than 200,000-square-foot Pecan Business Park at 3913 Todd Lane .
The Dallas-based firm will begin renovations on the six-building complex, which is about 90 percent leased.
Aquila Commercial and Transwestern were the transaction's brokers. Holliday Fenoglio Fowler arranged financing. Transwestern Austin will lease and manage the park.
DIVCOWEST BUYS FULLY LEASED AMD
AUSTIN (globest.com) – DivcoWest has purchased the 215,500-square-foot AMD 312 Building from Washington-based Burleson Investments LLC.
The two-story, Class-B-plus office building is on nearly 19 acres of Lockheed Martin Corp.'s former one million-square-foot campus at 6800 Burleson Rd.
AMD 312 is leased to Advanced Micro Devices until May. Once the lease lets up, DivcoWest will upgrade the 25-year-old building.
DivcoWest was self-represented in the transaction.
OMNI MANAGER UPGRADES TO OWNER
AUSTIN (globest.com) – After managing the Omni Austin Hotel Downtown for 15 years, Omni Hotels Corp. has purchased the 375-room property from Walton Street Capital LLC.
The Irving-based management company will invest $10 million into updating guest rooms at the 20-year-old hotel at 700 San Jacinto Blvd.
Omni Hotels Corp. now has 12 assets in Texas .
WATERSTONE SOLD
AUSTIN ( Austin Business Journal ) – SCI Companies of Los Angeles has purchased the recently completed Waterstone Apartments built by San Antonio–based Embrey Partners.
The 352-unit complex at 420 West Slaughter Ln. is valued at $24.6 million.
Apartment Realty Advisors represented the seller.
PRESSLER COMPLEX SLATED
AUSTIN (Capital City Partners, globest.com) – Gables Residential and local investors represented by Austin-based Capital City Partners Inc. will build Pressler, a 165-unit apartment complex featuring 26,000 square feet of ground-floor retail space.
Pressler is located on two acres at the northeast corner of Fifth and Pressler Streets in the city's West End . The name pays homage to Paul Pressler, who ran Pressler's Beer Garden in the 1870s.
Construction on the $35 million mixed-use project begins next month. The residential component will consist of one- and two-bedroom units ranging from 900 to 1,000 square feet. Move-in is scheduled for late next year.
Gables, based in Atlanta , has signed a 99-year ground and air rights lease with landowner Capital City Partners Inc. When completed, Capital City Partners will acquire the shell back at a fixed cost.
Locally based Aquila Commercial LLC is handling the retail space leasing. Looney-Ricks-Kiss Architects Inc. of Memphis is the project's architect.
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