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| October 16, 2014 |
Is Multifamily Finally Peaking?
Premier Technology Group is sponsoring the Austin Multifamily Summit on Oct. 30 (register here). It works with manufacturers that are the absolute finest in their industry, combining lighting control, fire and security, audio/video and networking systems into one fully functioning automation system. Click here to learn more.
There's plenty new of apartment projects popping out of the ground. (There's a good chance at least one of you reading this is at a groundbreaking right now.) But with 94% occupancy and the highest rents in years, fundamentals appear unshaken. That's why we're excited to host Bisnow's Austin Multifamily Summit on Oct. 30, starting at 7:30am to see when, if ever, multifamily will flatten.
Event panelist ARA principal Pat Jones (right, with colleague Andrew Childers) says lease-ups have been very successful in Austin, and deliveries have actually been pretty slow and spread out. Overbuilding concerns have made institutional investors cautious, but that's leaving a great opportunity for private investors who know what's what, he says. He's got two urban new construction deals on the market in Austin, Elan East and Lakeshore Pearl. They're ultra-luxury and a great price compared to Downtown, which has made them popular with investors.  Pat says private investors really got in the game on Northland at Stonehollow, a 600-unit property next to the Domain, but ultimately were beat out by an institutional all-cash buyer (after 20 tours and 10 offers). It's a '90s value-add property in a great location, with lots of room to upgrade and push rents. Pat's most recent deal was in San Antonio—a private investor with foreign capital purchased NoBu Station, a new 474-unit luxury community at Bulverde and 1604 (94% occupied). That's in the path of San Antonio's growth, and investors loved the fact that HEB owns land next door.
 Austin absorbed a record 4,800 units in the Q3 and actually gained occupancy, says event speaker and JLL managing director Scott LaMontagne (with his family). He tells us even more units will be delivered in the next two quarters, continuing the theme of supply and demand. Austin's prime renter demographic (18- to 34-year-olds) grew by nearly 70,000 over the past five years with no new supply causing a pent-up demand, Scott says.
 As more units deliver (another 7,500 are scheduled over the next few quarters), the market will probably test the current demand levels, he tells us. By Q3 and Q4 '15, the deliveries will taper down to about 1,500 units per quarter; as of now, only one project is planned for delivery in Q1 '16. Scott says a lot of high-rent, high-density development is in the works not only in the core, but also in South Austin, such as the Streetlights project, The Catherine. Areas like these will test how deep the renter pool is for the higher-rent projects that charge in the range of $2 to $3/SF. As a percentage of the population, how many can afford and be willing to pay for those kinds of rent structures, he says.
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Multifamily Rents Steady, but Below the Peak
It's a boon for renters, but just so-so for the multifamily owners as effective rent growth is down from its peak earlier this year. But, there's a silver lining to this cloud: the Austin-Round Rock MSA remains well above the national average in terms of effective rent growth and occupancy, according to the analysts at Axiometrics. (So, at least you're not in Boise.) The metro achieved 5.5% rent growth in December 2013 and fell below 5% in July for the first time in nine months. This is likely a function of the massive amount of new supply that has come on the market in the past 15 months.
 The stats aren't as scary as Axiometrics' offices. (That's Jay Denton, who heads the analytics department, working behind the caution tape listening to Monster Mash, we presume.) About 11,645 new units were delivered between the start of 2013 and the end of the Q3, with 10,139 more identified for delivery from now through the end of 2015. Axiometrics analysts have found that much of the rent growth is taking place among properties charging $700-$999 monthly rent. Properties at that level – which classify at B- or C — are experiencing effective rent growth in the 7% to 8% range. The new supply doesn't affect this class as much as it does Class-A, in which most of the new supply exists.
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RECA's KnockOut Night Gets New Digs
The Real Estate Council of Austin's biggest event of the year - KnockOut Night - will have a swanky new home for it's Feb 19 fundraising gala. This year, the festivities will be hosted by the new JW Marriott Austin downtown. (When it opens in February, it will be the largest hotel in Austin, the largest JW Marriott in the US, and the second largest JW Marriott in the world.) Incoming RECA board chairman Michael Cooper says partnering with the JW Marriott for KnockOut 2015 is going to be a boost for the event with many of the more than 1,000 attendees likely experiencing the JW Marriott Austin for the first time. |
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Crain's Names Bisnow to
Fast 50!
Crain's New York Business just named Bisnow No. 38 on its annual list of the city's 50 fastest-growing companies. We are overwhelmed with gratitude for this recognition. Among other fun facts, you'll learn that our CEO Ryan Begelman sojourned to Burning Man in August in search of inspiration for our (almost) never boring events and publications. (We promise we won't start pumping patchouli into our morning conferences.) We'd like to thank each of our 600,000 subscribers for your support and look forward to finishing off 2014 with top-notch events and actionable, edgy articles. |
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Last Night at Bisnow's Atlanta Power Women Event
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Nearly 500 joined us last night to celebrate the 40 most influential women in Atlanta commercial real estate at the City Club of Buckhead for a lovely cocktail awards reception. It's part of Bisnow's 2014 Power Women initiative in DC, Dallas, NYC, Atlanta, Los Angeles, Chicago, and Boston. |
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We were overwhelmed by the show of support and look forward to profiling the 50 most influential women in Los Angeles commercial real estate starting today. We hope you'll join us to honor them Nov. 12 at Casa del Mar in Santa Monica from 6-8pm. After that, if you happen to be in the Windy City, please join us to celebrate the top 50 women in Chicago at the Trump International Hotel & Tower on Nov. 18, 6-8pm. |
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Don't Miss Our Austin Multifamily Summit
Bisnow is thrilled to announce our fourth annual Austin Multifamily Summit coming up on Oct. 30, where you can hear the experts from ARA, Amli, JLL, Berkadia, HFF, and more discuss the hottest trends driving our market. Are you wondering which developments are in the pipeline or what opportunities are left? Join us as we delve into the depths of multifamily mania, starting with great networking at 7am at the Hyatt Regency Austin. Save your spot by registering now! |
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16 Days Until the Top Under 40 Developers / Investors
Meet in Miami
The top developers and investors under the age of 40 descend on the Ritz Carlton in South Beach for Bisnow's first annual "Ascent" multi-day summit. See who's attending and apply to be considered for one of the few remaining spots here. |
Yellow M&M, wicked witch, or Uncle Sam? So many Halloween costume choices. What are you going to be? We'd love to see your decorations, your doggy's costumes, or your adorable children all decked out for Trick-or-Treating. Send your spooky pictures to Catie@bisnow.com and Tonie@bisnow.com. |
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This newsletter is a journalistic news source which accepts no payment for featured interviews. It is supported by conventional advertisers clearly identified in the right hand column. You have been selected to receive it either through prior contact or professional association. If you have received it in error, please accept our apologies and unsubscribe at bottom of the newsletter. © 2013, Bisnow LLC, 1817 M St., NW, Washington, DC 20036. All rights reserved.
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