Downtown Austin Market News

[KevinFromTexas]

Originally Posted by GoldenBoot

How does any of this have to do with Magellan's proposed tower???

Please move this conversation elsewhere. Thanks.

Originally Posted by austlar1

Seems to me like you are the one who kind of got the ball rolling here. I just ran with it longer than I should have.

Don't sweat it.

[Jdawgboy]

Originally Posted by austlar1

With regards to the Austonian. The building has been open for business for about four or five years. Has Second Congress LTD been whittling away at the number of units they own over that period? I wonder how many they owned around two years ago, all the while claiming there were few, if any, units available. Let's face it, the Austonian was virtually empty for a few years and is only now looking like a building where a substantial number of people reside on a regular basis. The W in Austin is the real deal. I have friends in the building, and they assure me that the project has been a big success. They, however, are renters. I remain skeptical about the Four Seasons simply because the building is mostly dark most of the time. Maybe a lot of the buyers are out-of-towners, lobbyists, or second home empty-nesters. I don't know, but where the heck are they?

You know I've been wondering about the top 4 levels on the Austonian. The ones that you can buy the whole floor and build it out. Has anyone even bought any because it seems to me that those floors are still sitting empty and unfinished. It's not hard to tell since you can clearly see at night that they are empty.

Why don't they just build out several more condos on those floors and sell them instead of waiting for someone to throw down 15 million plus on an 8,000 sq space that would still have to be built to their preference which means putting down even more money unless the 15 million includes the build out? Maybe someone has info regarding that. I just think that it's a waste and looks bad for the Austonian to have its top levels empty for all to see. I think it's time for them to do something about that.

[KevinFromTexas]

http://www.bizjournals.com/austin/bl...el-battle.html

Austin, San Antonio engage in heated hotel battle as Texas capital ups its game

May 28, 2015, 6:02pm CDT
W. Scott Bailey
San Antonio Business Journal

San Antonio was the 10th most popular domestic destination for U.S. travelers in 2014 — several spots ahead of Austin, which ranked 16th, according to a Hotels.com report. Yet, the Texas capital is giving the Alamo City a run for its money in the hotel revenue race.

New data from Source Strategies Inc., an Alamo City-based hospitality industry consulting firm, shows that San Antonio’s hotel sector generated $296.6 million in revenue during the first quarter of 2015. Hotels in the Austin-Round Rock market generated nearly $287 million over the same period.

[GoldenBoot]

Oh boy...SA is getting a bit nervous.

[ILUVSAT]

Originally Posted by GoldenBoot

Oh boy...SA is getting a bit nervous.

As we should be. If Austin decides to expand the convention center, then SA will be crapping in their pants. Additionally, I believe, if all currently proposed hotel projects are built in downtown Austin, Austin will have more downtown hotel rooms than SA in the coming 5-7 years.

[The ATX]

Urban Outfitters is preparing to enter the restaurant business with two restaurants by U.T.:
http://www.foodworldnews.com/article...stin-texas.htm

I wonder what a Faux Hipster burger tastes like?

[KevinFromTexas]

According to this, the occupancy rate for Class A office space in Austin is 89.4%.

[Jdawgboy]

http://m.bizjournals.com/austin/blog...ic-office.html

Lots of buildings in DT changing hands.

[austlar1]

Hard to imagine demolition of the Littlefield Building or the Scarbrough Building. How will this guy (Kahn) make money buying these two properties for $84 million? I wonder what he has planned?

[KevinFromTexas]

I'm not sure, but that name rang a bell, and when I Googled it, I found out why. David Kahn was the one proposing that hotel tower at 8th & Congress next to 816 Congress that was shot down because it wasn't approved for concerns about blocking the capitol.

http://www.statesman.com/news/busine...and-e-1/nRcyq/
http://www.austinchronicle.com/news/...town-skirmish/

[AusTxDevelopment]

Originally Posted by austlar1

Hard to imagine demolition of the Littlefield Building or the Scarbrough Building. How will this guy (Kahn) make money buying these two properties for $84 million? I wonder what he has planned?

The Littlefield and Scarbrough buildings were built in 1910 and are designated as historic so you can't make any changes to the outside of them, but they both recently underwent a massive upgrade of their interior office spaces (upper floors) where the small dark offices were demolished and the brick was exposed, etc. to appeal to modern office tenants who like creative office space. The Business Journal did a story on it: http://www.bizjournals.com/austin/pr...-new-face.html

David Kahn also owns the Hannig Row building at 200 East 6th, so he is really familiar with historic buildings.

Hannig Row:

http://texastimetravel.com/public/up...g-building.jpg

[austlar1]

Originally Posted by AusTxDevelopment

The Littlefield and Scarbrough buildings were built in 1910 and are designated as historic so you can't make any changes to the outside of them, but they both recently underwent a massive upgrade of their interior office spaces (upper floors) where the small dark offices were demolished and the brick was exposed, etc. to appeal to modern office tenants who like creative office space. The Business Journal did a story on it: http://www.bizjournals.com/austin/pr...-new-face.html

David Kahn also owns the Hannig Row building at 200 East 6th, so he is really familiar with historic buildings.


Hannig Row:

http://texastimetravel.com/public/up...g-building.jpg

Is the historic designation for the building facades or for the entire structure? Sounds like the project Kahn once proposed for 8th and Congress involved keeping a designated historic facade while building something new (a boutique hotel) inside the facade. I still think 84 million bucks is a LOT of money to pay for two fairly small renovated buildings unless the buyer has plans to significantly enhance or alter one or both of these properties.

[AusTxDevelopment]

Originally Posted by austlar1

Is the historic designation for the building facades or for the entire structure? Sounds like the project Kahn once proposed for 8th and Congress involved keeping a designated historic facade while building something new (a boutique hotel) inside the facade. I still think 84 million bucks is a LOT of money to pay for two fairly small renovated buildings unless the buyer has plans to significantly enhance or alter one or both of these properties.

The Littlefield and Scarbrough buildings are free standing, no shared walls, so it's very, very difficult to do the same type of redevelopment that you can do to a protected building that just has a front facing facade, because all four sides of the buildings are covered by the historic designation. Also the reality is $84 million is only $350 per square foot, which is cheap for a downtown building right now. I know its a lot of money in total, but the major factor in commercial building purchase decisions is the price per square foot because rent revenue is per square foot. That's how you calculate your future value. The Bank of America tower is rumored to be selling for $475 per square foot, and other recent buildings downtown have sold for more than $400 per square foot. The lower price for Littlefield and Scarbrough is probably partially related to the restrictions on redevelopment due to their historic designation, as well as their small floors and smaller size for a downtown building.

[austlar1]

Originally Posted by AusTxDevelopment

The Littlefield and Scarbrough buildings are free standing, no shared walls, so it's very, very difficult to do the same type of redevelopment that you can do to a protected building that just has a front facing facade, because all four sides of the buildings are covered by the historic designation. Also the reality is $84 million is only $350 per square foot, which is cheap for a downtown building right now. I know its a lot of money in total, but the major factor in commercial building purchase decisions is the price per square foot because rent revenue is per square foot. That's how you calculate your future value. The Bank of America tower is rumored to be selling for $475 per square foot, and other recent buildings downtown have sold for more than $400 per square foot. The lower price for Littlefield and Scarbrough is probably partially related to the restrictions on redevelopment due to their historic designation, as well as their small floors and smaller size for a downtown building.

Do you mean to say that there is a total of 240,000 square feet of leaseable space in the Littlefield and Scarbrough buildings? I did not realize the buildings were that large, but I guess it makes sense at about 15,000 square feet per floor.

I was trying to find a sales price for the B of A property and the adjacent properties in the former T. Stacy block. The appraised value is in the range of $70 million according to several news reports, but none of the articles discussing the pending sale come up with the sales price of the B of A building or the other buildings on that block. What's up with that?

[Tech House]

Originally Posted by The ATX

I wonder what a Faux Hipster burger tastes like?

Hoppy, ironic, and overpriced, with notes of flannel and beard trimmings. All grass-fed, of course.

[drummer]

Not sure if I'd like to eat beard trimmings. Flannel might be okay.

[KevinFromTexas]

http://www.bizjournals.com/austin/bl...r-to-open.html

Another tech co-working space operator to open downtown
Aug 31, 2015, 10:38am CDT
INDUSTRIES & TAGS Technology, Commercial Real Estate, Entrepreneurs, Jobs, TechFlash

Another tech-focused co-working space operator is scheduled to open a downtown Austin office next year.

New York-based TechSpace Holding Co. plans to operate on the ground floor and the entire fourth floor of the San Jacinto Center in January. The office, which will be the company’s eighth, will include 28,000 square feet at 98 San Jacinto Blvd., according to a TechSpace announcement.

[The ATX]

I wonder if the anti-Californians crowd will become the anti-Floridians crowd now:

http://www.mystatesman.com/news/news...-califo/nnYy9/

[Tech House]

Originally Posted by The ATX

I wonder if the anti-Californians crowd will become the anti-Floridians crowd now

Those are jaw-dropping stats that go against what one would intuitively expect. Florida's net migration to Travis Co. totally stomped California's. Yet Florida's population is only about 60% of CA's. I'm admittedly obsessed with global warming but I have to wonder if there are many Floridians who realize that the writing's on the wall for them, what with South Beach already getting regular micro-floods of sea water and the ever-impending doom of the next big hurricane to make landfall there.

But here's the rub: Florida has been the only thing standing between Texas and the "Most Laughable State in The USA" title for many years now. According to the stats, the Floridians moving here have an impressively high average income, so I'm assuming we're not getting their "shirtless bleary-eyed parole violators answering the door in a rerun of Cops", but it still raises concerns. I'm going to assume that any face eaters who choose TX over FL will opt for Harris County, a much better fit.

[The ATX]

Originally Posted by Tech House

Those are jaw-dropping stats that go against what one would intuitively expect. Florida's net migration to Travis Co. totally stomped California's. Yet Florida's population is only about 60% of CA's. I'm admittedly obsessed with global warming but I have to wonder if there are many Floridians who realize that the writing's on the wall for them, what with South Beach already getting regular micro-floods of sea water and the ever-impending doom of the next big hurricane to make landfall there.

But here's the rub: Florida has been the only thing standing between Texas and the "Most Laughable State in The USA" title for many years now. According to the stats, the Floridians moving here have an impressively high average income, so I'm assuming we're not getting their "shirtless bleary-eyed parole violators answering the door in a rerun of Cops", but it still raises concerns. I'm going to assume that any face eaters who choose TX over FL will opt for Harris County, a much better fit.

Sigh. Everything is not so political. People move to where opportunities are.