Austin Real Estate Blog

A new mixed-use project is expected to break ground in Austin in 2010. The University Park development is within walking distance of the University of Texas-Austin, and will incorporate townhomes, condominiums, and apartment residences as well as a new movie theater, medical office space, and a luxury Andaz hotel. Construction is expected to commence in the second quarter of 2010. Located on the former site of Concordia University, the development is already pre-leasing commercial space and lead developer Andy Sarwal has indicated he expects to have tenants for 90% of available space before construction is completed on this project.

University Park is centrally located within easy walking or cycling distance of many of the prime attractions of the Austin area, including the State Capitol, the downtown financial and business district, and of course the University of Texas. Onair Development has announced plans for a 120,000 square foot medical office building in University Park in close proximity to St. David’s Medical Center. The building offers significant advantages for physicians who lease office space, including an exclusive tenant equity partnership plan that provides the potential for ownership over time.

Texas Monthly has already taken up residence in University Park; an Aveda Institute salon training facility has also signed a contract and is expected to open for business sometime in mid-2010. Premiere Cinemas will offer six or seven screens in a planned 450,000 square foot mixed-use building, which will incorporate 340 apartments and additional retail outlets as well. Developer Andy Sarwal is encouraging builders in University Park to commit to green standards and LEED certification, making this development even more attractive to tenants in the Austin area.

Austin’s downtown area has fared better in the recent economic downturn than many other cities; this is due in part to the vibrant medical, solar, and green technology sectors in the Austin area. Additionally, Austin’s business-friendly policies have attracted major employers to relocate their headquarters to the area; one recent acquisition for the Austin economy is Hanger, a major manufacturer and supplier of medical prosthetics and durable medical goods.

All over Haiti, buildings and other infrastructure have been destroyed and people are struggling to survive.

The recent earthquake in Haiti has caused untold suffering and massive devastation to residents of this small island nation.  The humanitarian aid efforts are already underway, and rebuilding plans are expected to begin soon.  Many Austin residents have been moved by the plight of the people of Haiti, and contributions are pouring in from all over the world to assist those affected by this tragedy.  A number of local Austin organizations and companies are also working to help Haiti recover from this disaster and to provide clean water and food to the victims of the earthquake.

Austin-based Whole Foods Market, Inc. has announced the creation of a fund to help provide relief to disaster victims in Haiti.  Donations will be accepted at all 289 stores throughout the United States, and will be distributed to a number of direct aid organizations, including Doctors Without Borders, Action Against Hunger, AmeriCares, Food for the Poor, Partners in Health, and the American Red Cross.  Whole Food Markets is also collecting donations of food, clothing, and money to support staff members who have been affected by the disaster in Haiti, and working with national organizations to facilitate the delivery of food and water to the areas hardest hit by the earthquake.

The American Red Cross of Central Texas is also active in the Haiti relief efforts, and is currently requesting donations of bottled water, food, and other supplies.  It is also looking for temporary shelter and medical services for those injured or homeless due to the earthquake.  Additionally, the American Red Cross has joined forces with the U.S. State Department to allow individuals to donate through their cell phone bill; simply text the word “Haiti” to 90999, and a $10 donation will be automatically added to the monthly charges for the cellular phone.

Several Austin firefighters and emergency workers are headed to Haiti to take an active part in the rescue and recovery operations on the ground; they will bring needed supplies and expertise to the relief efforts in heavily populated areas of Haiti, including Port-au-Prince.  Austin companies providing matching funds for relief donations include Austin Ventures, Silicon Laboratories, and the MFI Foundation.  Austin residents can qualify for these matching funds by making their donations through http://www.givetoaustin.org/helphaiti, Austin residents can qualify for these matching funds.

Austin leads the nation in economic growth due to the diversity of local and statewide businesses, the University of Texas, and overall good business climate.

A recent Brookings Institution report shows that Austin’s economy continued to grow in 2009 while other cities experienced slumps and downturns in their economies. The report finds that Austin grew more from 2008 through 2009 than any other major metropolitan area in the United States. While that growth was a mere two percent increase, it far outstripped the country’s overall metropolitan performance, which decreased by an average of 2.4 percent nationwide.

Austin’s economic growth was spurred mostly by consumer spending and professional and technical services, according to the report. While manufacturing and durable goods decreased, technology-based industries continued to thrive in the area. Austin’s economy has grown approximately 35 percent in the last decade, and the last census showed a 48 percent increase in population in this highly desirable metropolitan region. Austin’s location in Texas has helped it to maintain a healthy economy, but the Brookings Institution report indicates that Austin easily outperformed other major cities in Texas including San Antonio and Dallas.

One major area of growth that has kept Austin’s economy strong is the health care field. Major health care insurers, service providers, and manufacturing concerns have flocked to Austin in recent years, drawn in part by the highly-trained workforce and the business-friendly attitude of Austin’s city leadership. The increasing population of Austin requires large-scale health care service providers, and in recent years more than $1 billion in health care construction and investment has taken place in the Austin area. This provides jobs for area residents; in fact, in 2009 health care employment increased 5.5% overall in the Austin metropolitan area in contrast to a two percent increase nationwide.

Austin’s diverse employment base is also cited as a reason for its economic success. In addition to health care employers, the state government, educational institutions, and many other corporate interests provide jobs for residents. The resilient housing market in Austin is due in part to the stability of these employers, along with consistent population growth creating constant demand for properties in the Austin area. Austin consistently ranks in the top tier of American cities for quality of life and economic opportunity, which attracts many businesses and individuals to the area.

The Brookings Institution report ranked three Texas cities in the top five cities in terms of economic growth. The top five in order are: Austin; Washington, D.C.; McAllen, Texas; Virginia Beach, Virginia, and San Antonio, Texas.

You can view the interactive map on the Brookings Institution website. Below is a snap-shot of the overall economic growth situation.

Brooking Insitution Map of Economic Growth

Offices and other commercial space in Austin are bucking the national trend of falling rents and difficult financing.

A recent Grubb & Ellis Company forecast lists Austin, Texas as the number one city in the nation for commercial real estate investment. Long considered one of the top ten markets in the U.S. for retail, industrial, multi-housing, and office real estate ventures, Austin tops the list for office real estate, beating out cities like Washington, D.C., Los Angeles, Houston, San Diego and Denver. Austin ranked seventh in the nation for retail investment opportunities; Los Angeles held onto the top spot in that category. Austin’s overall strong showing in the commercial market is the result of a number of synergistic factors that have allowed the area to weather recent downturns while remaining relatively unscathed.

Grubb & Ellis credited a strong local economy including government and educational sectors for much of Austin’s strong showing. Federal, state and local government agencies provide over 150,000 jobs in the Austin area, offering a stable employment base that has shielded Austin against the unemployment woes that have plagued other areas in recent years. During 2009, a year when many other major metropolitan areas saw severe job losses and worsening recession, Austin escaped the brunt of the economic downturn with an overall job loss rate of 0.7 percent.

Green technologies are bridging much of the employment gap. Solarbridge and Heliovolt have recently opened offices in the area, and Gemini Solar has begun construction on what will be the largest solar power plant in the country. The plant will be part of AustinEnergy’s overall plan to provide clean electrical energy to the region; located in eastern Travis County, it is expected to generate 30 megawatts of electrical power upon completion in 2010. These new expansions and construction projects will provide additional employment for Austin area residents, and are expected to stimulate growth in the local economy.

Austin’s real estate industry got another boost in a report by Oxford Commercial Inc., which showed that commercial office space leasing stabilized in the fourth quarter of 2009 after three straight quarters of steep declines. Prices for office space have increased in some areas, notably in the downtown area where demand is typically highest. The improvement in leasing figures is believed by most analysts to mark the beginning of an economic rebound in the Austin area. While Austin has experienced fewer difficulties than other areas, it has still felt some of the effects of the nationwide economic woes; this news along with the high ranking by Grubb & Ellis is expected to cement Austin’s position as one of the most desirable commercial markets in the nation.

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