Austin's Next Wave of High-Rises

[ILUVSAT]

Originally Posted by The ATX

...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...

Seriously? Lincoln just finished 5th & Colorado (with no problem) and Lynd was a partner in The Bowie (along with Endeavor).

When you say "stuff," are you referring only to high-rises? Lynd/Kairoi is quite active and successful in both Austin and San Antonio. Heck, they've quietly developed a massive, 300+ unit apartment complex on 620 near Hudson Bend (among several other big projects).

[The ATX]

Originally Posted by ILUVSAT

Seriously? Lincoln just finished 5th & Colorado (with no problem) and Lynd was a partner in The Bowie (along with Endeavor).

When you say "stuff," are you referring only to high-rises? Lynd/Kairoi is quite active and successful in both Austin and San Antonio. Heck, they've quietly developed a massive, 300+ unit apartment complex on 620 near Hudson Bend (among several other big projects).

I'm only referring to 300'+ downtown projects. Lincoln and Endeavor (who worked with Lynd on The Bowie) projects would be high on my list AFTER White Lodging and Trammell Crow. I only listed the projects that I felt were most likely to break ground soon. Instead of getting angry, feel free to list the ones you think have the best chance of starting soon.

[Syndic]

With so much construction in general happening in Austin and with the Independent, 3rd + Shoal, Austin Proper, and Fifth + West happening, I totally didn't realize that so few projects had started up until I read this. But you're right!

Alexan seems like a lock. I'm surprised it took so long for development to start in that area since everybody has known for years that Waterloo Park is going to be bad-ass once it's finished. Alexan is going to get the jump on other developers but it's still a late jump.

I think all of your picks are logically sound, The_ATX.

But what about The Avenue? Is that looking more like a 2019 timeline?

[The ATX]

Originally Posted by Syndic

But what about The Avenue? Is that looking more like a 2019 timeline?

I think the Avenue and 48 East are having trouble getting financing. The site plans for both of them have been approved for a while, but there is no sign of any groundbreakings. They don't have big national developers behind them either which may be why they are having trouble getting underway.

[Jdawgboy]

Originally Posted by 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.

311 Bowie got built so I would say that is a good track record. Also even if financing has not been announced, that doesn't necessarily mean they are not close to securing financing. Usually that is kept under wraps until the deal is done and set. I agree that we need to see signs that the Extended Stay is about to close down, so far that hasn't happened yet.

[urbancore]

bump

[GoldenBoot]

The next wave will be interesting. With the next recession looming, how many will actually come out of the ground?!?

[Dale]

Originally Posted by GoldenBoot

The next wave will be interesting. With the next recession looming, how many will actually come out of the ground?!?

Where did you hear that a recession is looming ?

[lzppjb]

I won't answer for anyone else, but honestly...recessions are always looming. It's cyclical.

[Austinite101]

Originally Posted by Dale

Where did you hear that a recession is looming ?

Inflation is picking up, there's some international economic uncertainty, some economic indicators associated with a stale, aged bull market are showing red flags, etc. Recessions are a matter of when, not if. We're due for one soon.

[hookem]

Originally Posted by Austinite101

Inflation is picking up, there's some international economic uncertainty, some economic indicators associated with a stale, aged bull market are showing red flags, etc. Recessions are a matter of when, not if. We're due for one soon.

Indeed. We are in the longest bull market in history. What has happened after all the previous longest bull markets in history?

[We vs us]

I think there's the possibility of a recession plus one for construction -- not only the standard cycle finally coming back around, but the effect of tariffs on construction material.

[Dale]

Originally Posted by Austinite101

Inflation is picking up, there's some international economic uncertainty, some economic indicators associated with a stale, aged bull market are showing red flags, etc. Recessions are a matter of when, not if. We're due for one soon.

I'm intrigued by the apocalyptic impulse of Americans who would otherwise not consider themselves religious.

Well, maybe it's not exclusively Americans. Torontonians have been wringing their hands about an impending "bubble" for years. I mean YEARS.

[Azul]

I'd be skeptical to layer the cyclical market onto Austin's development. It's a legitimate worry but realize there's several assumptions to be made to tie these things together and predict development tanking.

The biggest one is assuming that the regional economy will mirror that of the nation/world as a whole which is likely not going to be the case after seeing our growth during the 2008 Recession. For the time being our industries are still thriving and likely still will when the next cyclical recession hits, though I wouldn't expect as well as 2008, honestly.

Another assumption would be that these investors would pull out funding during a recession, which could happen but would be unlikely as Austin and Texas as a whole is still a net-positive investment on their end. In addition smaller projects with tighter budgets and weaker investors are typically the ones that get hit the hardest. This leaves construction, engineering, and architect firms to lose some of their "filler jobs" and thus they usually take on these larger projects at a slight discount because they can't afford to lose all work. It gives these larger developments more incentive to get these projects rolling.


tl; dr - Austin is weird, nuanced, and there's a lot of gears moving with cyclical recessions

[Geckos_Rule]

Originally Posted by Azul

I'd be skeptical to layer the cyclical market onto Austin's development. It's a legitimate worry but realize there's several assumptions to be made to tie these things together and predict development tanking.

The biggest one is assuming that the regional economy will mirror that of the nation/world as a whole which is likely not going to be the case after seeing our growth during the 2008 Recession. For the time being our industries are still thriving and likely still will when the next cyclical recession hits, though I wouldn't expect as well as 2008, honestly.

Another assumption would be that these investors would pull out funding during a recession, which could happen but would be unlikely as Austin and Texas as a whole is still a net-positive investment on their end. In addition smaller projects with tighter budgets and weaker investors are typically the ones that get hit the hardest. This leaves construction, engineering, and architect firms to lose some of their "filler jobs" and thus they usually take on these larger projects at a slight discount because they can't afford to lose all work. It gives these larger developments more incentive to get these projects rolling.


tl; dr - Austin is weird, nuanced, and there's a lot of gears moving with cyclical recessions

Still, there were several towers during that time that didn't get built due to the recession. For example, the Hotel Van Zandt was originally planned to be built concurrently with the Shore Condos around 2007, but they stopped it until 5-ish years later.

[StoOgE]

Originally Posted by Geckos_Rule

Still, there were several towers during that time that didn't get built due to the recession. For example, the Hotel Van Zandt was originally planned to be built concurrently with the Shore Condos around 2007, but they stopped it until 5-ish years later.

Yeah, but I will say that the financial collapse at that time froze financing at a very high level and specifically funding for large scale projects came to a screeching halt nationally. I was still working in finance back then, and it was a real wacky moment.

Assuming whatever recession we enter in the next 4-5 years looks like is a more normal correction and not something that catastrophic there will be capital available for projects in off-cycle sectors or regions.

The last recession (hopefully) isn't a useful predictor of normal downturns. Though, all out trade wars and protectionism is a fun thing was haven't really seen at scale since pre-WWII. So, hopefully we get away from this stupidity and get back to free trade.

[N90]

Here is the next wave. I wont include any under construction, so just the proposals or the ones in site demo. I'll post the ones that have renderings, site plans and massings, or at least conceptual designs.

6 X Guadalupe 848 feet

https://i.imgur.com/8dS57pd.png

The Republic 709 feet

https://i.imgur.com/wJVEO1g.png

Block 185 593 feet

https://i.imgur.com/L8vQZJs.png

Block 71 542 feet

https://i.imgur.com/y3WDCuj.png

305 W. 5th 480 feet?

http://i1072.photobucket.com/albums/...psdezk7dat.jpg

300 Colorado 446 feet

https://i.imgur.com/P79SoqE.png

711 Trinity 436 feet

http://i.imgur.com/mEaVn0d.png

Velocity Tower 400-450 feet?

https://static.wixstatic.com/media/8...b4a7c~mv2.webp

48 East 358 feet

http://i.imgur.com/9kdzUxF.png

Hotel Mirabeau 357 feet

https://i.imgur.com/WChqaNC.png

405 Colorado 356 feet

http://i1072.photobucket.com/albums/...psrbbor0rt.jpg

5th & Brazos 355 feet

https://i.imgur.com/I2t8hgN.png

91 Red River 354 feet

https://i.imgur.com/NVJiKkL.png

One Austin 353 feet

https://i.imgur.com/6YNQry7.png

Alexan Capitol 350 feet

https://c2.staticflickr.com/2/1827/4...e1cbccd4_h.jpg

The Avenue Hotel 346 feet

https://nelsenpartners.com/wp-conten...-Level_8th.jpg

56 East 250 feet?

http://i1072.photobucket.com/albums/...psdmyk3zmj.jpg

17th Street 220 feet

https://i.imgur.com/4WXP51W.png

425 Riverside 216 feet

https://i.imgur.com/qveGAxC.png

The Standard 191 feet

https://media.licdn.com/media-proxy/...bhU4hGUB5sE-Pg

Two Two Zero Four 180 feet?

https://static.spacecrafted.com/aae1...XEEL39JLpCdD4p

The Huston 170 feet

https://i.imgur.com/Y9lpLFE.png

82 Rainey 160 feet?

https://i.imgur.com/fSbsgWk.png

Cambria Hotel 140 feet?

http://i.imgur.com/h2g6nID.png

916 Congress 133 feet

http://i.imgur.com/vvNY9Wx.jpg

Travis Co. Courthouse 130 feet?

https://mms.businesswire.com/media/2...jpg?download=1

1108 Nueces 65 feet

https://c1.staticflickr.com/5/4624/2...a0cd111f_h.jpg

Canopy by Hilton 60 feet?

https://austin.towers.net/wp-content...7528866529.png

[NYC2ATX]

Originally Posted by StoOgE

Yeah, but I will say that the financial collapse at that time froze financing at a very high level and specifically funding for large scale projects came to a screeching halt nationally. I was still working in finance back then, and it was a real wacky moment.

Assuming whatever recession we enter in the next 4-5 years looks like is a more normal correction and not something that catastrophic there will be capital available for projects in off-cycle sectors or regions.

The last recession (hopefully) isn't a useful predictor of normal downturns. Though, all out trade wars and protectionism is a fun thing was haven't really seen at scale since pre-WWII. So, hopefully we get away from this stupidity and get back to free trade.

I have a pretty simple reason for fearing a recession's effects less in Austin in particular, and that's because so much of the boom in the city is tech-driven.

The last time tech was the cause of a recession (the dot-com bubble), so much more of the money going through Silicon Valley was speculative and the entire industry itself was in its infancy. There had not yet been much proof of profitability. Even since the Great Recession, the tech industry has matured so much and seems to run on its own set of principles that preclude some of the more volatile aspects of the economy.

We haven't yet seen how the tech industry would respond to a contraction of activity now that literally everyone has a smartphone, and Amazon and other online retailers are monumental money-printing machines. None of these companies are going anywhere this time, and Austin has firmly established itself as both a tech and tourism hub in the decade since 2008. Even if a recession causes the average American to keep the purse-strings tighter, phones, tablets, and the Alexas and Siris of the world aren't going anywhere.

Also, it has already been stated that if anything will tip the US into a recession, it won't be a real estate bubble this time, but either the bubble of student and credit card debt, the current trade war or continued volatility in the federal government that will do it. These big new projects coming online have shown that they are going ahead with tenants and numbers that prove their viability, and honestly, the Texas economy itself is such a steamroller that it would take more than a normal cyclical correction to destabilize everything locally. I'm not so worried at the moment.


Also N90, thank you for the new rundown, I'm weeping tears of joy at these towers. YAAS

[hookem]

Originally Posted by NYC2ATX

I have a pretty simple reason for fearing a recession's effects less in Austin in particular, and that's because so much of the boom in the city is tech-driven.

I like your thinking, and hope you are right. But here are my reasons for concern about a potential recession having an effect here in Austin regardless of the tech boom -

1) Interest rates rising will affect property values everywhere
2) The high current valuations and the new $10K SALT deduction limit may have an impact on property values
3) There is a small but increasing investment portion of the Austin housing market; high end second homes, investment properties, etc that are not employment driven. They are, in part, counting on the high appreciation. Once that slows or even reverses a little bit, there could be a snowball effect with many properties coming on the market. Especially those that have already seen big appreciation in the last few years -- investors will want to cash in on those gains rather than risk them evaporating.

Although not directly related to Austin in particular, we are in a period where everything is on the high end of historic valuation -- Stocks, Real Estate, Bonds. And interest rates are still on the low end. It just doesn't seem sustainable without at least a moderate correction.

[wwmiv]

Wouldn’t that only affect condo development? There have been very few condos delivered downtown in the last decade; most of the new towers are office, hotel, and apartment.