Austin's Next Wave of High-Rises

[The ATX]

EDIT: The project list was updated as of 06/2018. The ones highlighted in green are underway, and the one highlighted in yellow is completed.

The discussion in a couple threads got me wondering what the next high rises (300'+) would be most likely to start. The list of 27 projects below shows how big our pipeline is for 300+ footers. All of the projects on the list have been mentioned in the Austin sub-forum at some point in time.

The last project to get underway - 70 Rainey - barely got started due to financing. Since then there haven't been any announcements about projects (the 300+ footers) breaking ground with financing in place. Even though Austin continues to boom, financing nationwide seems to be harder to get.

Of all the projects on the list, the only one I'm confident about is the 32-story Marriott. White Lodging has an excellent track record, and they can finance in house like they did with the Aloft.

What are everyone's thoughts on the next big ones to break ground?

[AustinGoesVertical]

This is a very impressive pipeline. If even 25-50% of this comes to fruition, the skyline will change dramatically. I feel good about the Marriot actually happening. Next is 3rd and Colorado because Riverside Resources put their money where their mouth was for 5th and West. The Avenue and 48 East look to be the next in line.

For more speculative projects, I'm bullish on the UT Block actually happening because looks like a lot of legwork has been done on the design end and we'be seen square footage numbers and I think unit numbers, etc. come out.

405 Colorado is a ? because the design is being overhauled. My hope is they keep some of the original components - the abstract shape, line lighting, and glass elevators, but reduce the podium.

5th and Brazos will continue to amaze me. Magellan is reputable in Chicago and the person I talk to over there keeps mentioning this as something that is definitely happening. I don't know why we haven't seen any movement.

99 Trinity is DEAD for me while Waller Park Place feels too much like a vision. The lack of high quality renderings or a website, pre-leasing, lack of hotel operator, etc. makes me think that is more like 5 years out.

[Jdawgboy]

It's a sure bet that there are projects that we have no idea about as evidence by The_Genral's tantilizing post on the Independent thread. Of course without official verification or press releases it's simply juicy gossip, however with strong backing given the people he heard it from, there is likely something to it.

Also lets not beat around the bush, we have a couple of posters on here that know some things but for reasons that they cannot divulge what they know, they occasionally throw in little hints here and there and leave us speculating by what they meant.

All in all it will ultimately come down to who has the financing to back up their project and the timeline as to which projects will be built going forward.

[The ATX]

Bump.

I started this thread back in March, and I just now updated the 300'+ project list in the OP. The project pipeline has gotten even larger since then, but we still haven't seen a significant number of large projects break ground since the summer of 2016.

The Marriott did end up being the first 300'+ project to break ground - if the demo is considered to be breaking ground. But beyond the Marriott, which one is next?

Austin is still booming, but financing appears harder get. Since the last post, a few of the big projects have gotten site plans approved:

The Avenue
Hotel Mirabeau
48 East

But there is still no solid info about their groundbreaking. I think financing is becoming a problem.

[Jdawgboy]

I have a feeling that we are entering a freeze period where little in the way of financing is going to take place. Midrise projects will move forward but we may be coming to the end of this building cycle for larger projects. The one building I'm pulling for is 608 Guadalupe but in general, I think it will be another year before we see the next wave really pick up. That of course will depend heavily on the state of the world economy.

[The ATX]

I don't have a good feeling about the three with approved site plans that I listed in my previous post starting any time soon. But Block 71 - and fortunately - 600 Guadalupe seem to have some momentum.

IIRC at last word, these three had December start dates:

Hotel Mirabeau
48 East
3rd & Colorado

But I don't have any confidence that they will break ground on schedule.

[JoninATX]

In other words Austin will be taking a breather.

[brando]

What project is taking up the last lot from the water plant? The one at the southwest corner of the creek across from the library?

[The ATX]

Originally Posted by brando

What project is taking up the last lot from the water plant? The one at the southwest corner of the creek across from the library?

That's Block 185.

[We vs us]

The lack-of-financing theory is interesting. Any clue as to why that might be? Austin still seems like one of the better bets nationally. All things being equal, if I'm a big lender, I'd be pretty bullish on Austin projects.

EDIT: also, would landing a high profile project (like HQ2, say) make funding easier for everyone in the city? Interested in how funding generally works beyond individual (developer's) creditworthiness.

[austlar1]

Originally Posted by We vs us

The lack-of-financing theory is interesting. Any clue as to why that might be? Austin still seems like one of the better bets nationally. All things being equal, if I'm a big lender, I'd be pretty bullish on Austin projects.

EDIT: also, would landing a high profile project (like HQ2, say) make funding easier for everyone in the city? Interested in how funding generally works beyond individual (developer's) creditworthiness.

Projects get built with construction loans or construction funding that is usually repaid quickly upon completion. Developers then have to refinance or dig deep into their own (and investor pockets) to repay construction loan. Perceived project viability plays a big role in funding decisions. Austin has a lot of hotel rooms in the pipeline or recently delivered. Ditto for high end apartments and condos. The demand for huge amounts of new office space seems to be present, but that could quickly change. Some of the projects currently under construction seem to have struggled to obtain funding- ie, Hotel Zaza/Gables and 70 Rainey. I am sure there are real estate or construction industry folks here that can provide a better explanation, but it makes sense to me that lenders might be feeling a little cautious at this point in the current building cycle. The attached link is pretty good primer on the two stage loan process for financing new projects.

https://www.propertymetrics.com/blog...ruction-loans/

[We vs us]

Originally Posted by austlar1

Projects get built with construction loans or construction funding that is usually repaid quickly upon completion. Developers then have to refinance or dig deep into their own (and investor pockets) to repay construction loan. Perceived project viability plays a big role in funding decisions. Austin has a lot of hotel rooms in the pipeline or recently delivered. Ditto for high end apartments and condos. The demand for huge amounts of new office space seems to be present, but that could quickly change. Some of the projects currently under construction seem to have struggled to obtain funding- ie, Hotel Zaza/Gables and 70 Rainey. I am sure there are real estate or construction industry folks here that can provide a better explanation, but it makes sense to me that lenders might be feeling a little cautious at this point in the current building cycle. The attached link is pretty good primer on the two stage loan process for financing new projects.

https://www.propertymetrics.com/blog...ruction-loans/

Good info. I can see the skittishness -- definitely with hotels, which still need to incorporate some amazing increases in room count in 2017, 2018 and beyond.

That said, I just came across another ABJ article about our hot office market -- which is starting to match major market demand and pricing.

https://www.bizjournals.com/austin/n...d-silicon.html

Austin's red-hot commercial real estate market means office tenants are paying rental rates similar to those found in some of the country's priciest cities.

That's according to new research on the cost of office space from CommercialCafe, a real estate research firm.

A tenant spending $5,000 per month for Class A office space can get 1,087 square feet in Austin.

That trails only Boston (where you could afford 1,006 square feet); Washington, D.C. (849 square feet); San Francisco (803 square feet); and New York City (703 square feet).

I'm a little amazed, with that kind of money to be made, that we're not seeing MORE projects with solid money cropping up.

[mumu]

Originally Posted by We vs us

I'm a little amazed, with that kind of money to be made, that we're not seeing MORE projects with solid money cropping up.

Is this just Downtown Austin? That seems so high if it's the whole city. We have large grass fields just 3-4 miles from the Capitol (East/SE). Downtown Austin is sort of running out of space; it's tiny compared to the DTs of other cities.

[SkyPie]

Originally Posted by mumu

Downtown Austin is sort of running out of space; it's tiny compared to the DTs of other cities.

I've often wondered where the boundaries of downtown Austin will stretch and expand over the next 20-30 years as available land in downtown proper is developed. West seems very unlikely and so does south due to the Bouldin Creek and Travis Heights neighborhoods boxing it in. Maybe north towards the capital complex and West Campus? East seems like the most likely candidate, but given current constraints on height, I'm not sure how feasible that will be either. Perhaps a push for more density in the northwest section of downtown?

[drummer]

Originally Posted by SkyPie

I've often wondered where the boundaries of downtown Austin will stretch and expand over the next 20-30 years as available land in downtown proper is developed. West seems very unlikely and so does south due to the Bouldin Creek and Travis Heights neighborhoods boxing it in. Maybe north towards the capital complex and West Campus? East seems like the most likely candidate, but given current constraints on height, I'm not sure how feasible that will be either. Perhaps a push for more density in the northwest section of downtown?

Also along Riverside and south to Oltorf, etc., on the east side of I-35.

[lzppjb]

Originally Posted by SkyPie

Perhaps a push for more density in the northwest section of downtown?

This is what I think happens.

[Jdawgboy]

Well if you look at the South Shore Central vision, DT can most certainly expand south, though not very far. Depending on how the area is developed, we could see a good amount of sq footage. It will come down to timing and market demand.

[The ATX]

It's time for a thread bump to see where we are at. I updated the list of 300'+ projects in the OP from from my next tallest projects list update.

Austin's economy and population continue to boom. But financing for large projects is getting much more difficult to obtain nationwide. The Marriott was the only large (300'+) project to break ground in 2017. So far in 2018, Block 71 is the only big project to get started. All of the 300'+ towers U/C are topped out or close to it. The cranes will be gone for a short period of time until late July when the Marriott cranes go up.
Among the taller projects that I previously thought were a good bet to break ground was Hotel Mirabeau. I now think that one might be dead. Currently the best bets appear to be:

300 Colorado (Financing should be a no brainer for a 100% pre-leased project.)
Alexan (Site plan is approved and Trammell Crow Residential is behind it)
405 Colorado (Site plan is approved and Brandywine doesn't seem to have an issue with financing a project like this.)

[austlar1]

Originally Posted by The ATX

It's time for a thread bump to see where we are at. I updated the list of 300'+ projects in the OP from from my next tallest projects list update.

Austin's economy and population continue to boom. But financing for large projects is getting much more difficult to obtain nationwide. The Marriott was the only large (300'+) project to break ground in 2017. So far in 2018, Block 71 is the only big project to get started. All of the 300'+ towers U/C are topped out or close to it. The cranes will be gone for a short period of time until late July when the Marriott cranes go up.
Among the taller projects that I previously thought were a good bet to break ground was Hotel Mirabeau. I now think that one might be dead. Currently the best bets appear to be:

300 Colorado (Financing should be a no brainer for a 100% pre-leased project.)
Alexan (Site plan is approved and Trammell Crow Residential is behind it)
405 Colorado (Site plan is approved and Brandywine doesn't seem to have an issue with financing a project like this.)

I agree with your list, but I wonder whether you might add 6th and Guadalupe to it some time soon. The architect who has been posting some about this project seems to have the skinny on the timeline, and he's suggesting something is likely to start to happen later in the year. On the other hand that extended stay hotel does not seem to have gotten the message, so who knows??

[The ATX]

I hope 6th & Guadalupe gets started more so than any other project. But it's not financed as far as we know, and I'm not yet sold on Lincoln and Lynd/Kairoi's ability to get stuff built. I put a lot of emphasis on a developer's track record for predicting the success of their projects. White Lodging is #1 in my book when it comes to getting their proposals built. Trammell Crow is right behind them, and Block 185 would be #4 on my list of the next big ones to get started if it was further along in the approval process.