Category: Central/South Texas

Rent Growth Likely to Slow as Uncertainty from COVID-19 Looms Over the Market

Posted on by Sarah

Prior to the March onset of the COVID-19 pandemic, and related virus control measures bringing business across the state to a halt, the Austin office market witnessed some softening in availability as asking rents continued to push higher. At the end of the first quarter, the overall average asking rent stood at $39.28 per square foot (psf), reflecting annual (9.2%) and quarterly (2.4%) increases. Class A asking rents increased by 5.8% over the year to $42.93 psf. Central Business District and suburban asking rents increased by 6.7% and 7.7% year over year through the first quarter, respectively. As the market adjusts itself to the shifts that COVID-19 has created, rental rate growth is expected to slow. Downward pressure is likely to come from an influx of sublease space on the market as venture-capitalfunded technology companies implement cost-saving measures. Availability rates see year over year softening and are expected to continue to rise as COVID-19 reality sets in Austin’s overall availability rate increased by 10 basis points over the quarter, and 280 basis points year over year, to 13.8% in the first quarter of 2020. In comparison, the average Class A availability rate declined 20 basis points over the quarter, but is still up 430 basis points on an annual basis (14.9%). Market fundamentals differ some in the core and surrounding markets, the Central Business District availability rate rose by 200 basis points to 11.1%, while the average suburban availability rate declined by 30 basis points, to 14.5%. Click to read more at www.savills.us.

Minneapolis’ United Properties moving into Austin market

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Minneapolis-based development company United Properties will establish a development office in Austin, Texas, with the hiring of local industry veteran Josh Delk as senior vice president, Austin commercial development, effective April 13. This move marks the third operating location for the privately held development company in its 104-year history. “We’ve studied the Austin market very carefully, our leadership has some familiarity with Austin, and we’ve generally been impressed by its growth trajectory and how it’s responded in both market expansions and downturns alike,” says Bill Katter, president and chief investment officer, United Properties Development. United Properties has had just two private owners in its history. Since 1998 the company has been owned by the Pohlad family of Minneapolis, owners of a diverse portfolio of businesses including Major League Baseball’s Minnesota Twins. United Properties was originally established in 1916 by members of St. Paul’s Hamm family to develop establishments to serve their brewing company’s beer. Click to read more at www.rejournals.com.

Austin City Council Approves 60-Day ‘Grace Period’ For Owed Rent

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Austin tenants affected financially by the COVID-19 pandemic have 60 days to come up with owed rent once a landlord starts threatening eviction. With a unanimous vote Thursday, council members approved an ordinance adding another step to the eviction process, thereby slowing a potential force-out of tenants unable to pay rent because their wages have dried up. It goes into effect immediately and applies to both residential and commercial properties. “No one should lose their home during the pandemic,” Council Member Greg Casar, who brought the item forward, said. “It’s wrong and it’s also terrible for public health.” There had been confusion on behalf of renters and landlords about how to move forward amid staggering unemployment. Some landlords have begun offering payment plans to those affected by the coronavirus, while others have reiterated that rent is due in full. Before council’s vote, landlords could still file evictions against tenants, although Travis County judges are not hearing these cases. Judges have suspended eviction hearings until at least May 9. The new rule buys renters time by adding a step to the eviction process, which typically begins when a landlord posts a “notice to vacate” sign on a tenant’s door. This indicates the intent to file an eviction with the courts within days unless the tenant pays rent or moves out. Click to read more at www.kut.org.

After offer, Travis Central Appraisal District and Austin Board of Realtors at market data impasse

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After the Austin Board of Realtors offered what it called a possible solution to an ongoing dispute over market data access Feb. 27, the Travis Central Appraisal District said it would not change its decision to use last year’s home appraisal values again this year. TCAD Chief Appraiser Marya Crigler in a Feb. 27 statement described ABoR’s offer to provide aggregate housing market data organized by ZIP code as “disingenuous.” “It would be illegal for us to change market values without having the data to support those changes,” Crigler wrote, adding aggregate data would not justify “across-the-board” increases on individual properties and that doing so would violate both state code and industry standards. ABoR’s offer arrived after the appraisal district announced Feb. 12 that home appraisal values would not change this year after ABoR sent a cease-and-desist order in May prohibiting use of its market data in the appraisal process. Texas is a nondisclosure state, which means real estate sales prices and other market data are not public record. Click to read more at www.communityimpact.com.

Crane spotting: Construction in full swing on numerous projects in Northwest Austin

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Construction cranes have emerged in Northwest Austin as tech companies and entertainment options target the growing area.

In 2019, several major projects, including Apple’s second campus and Austin FC’s soccer stadium, broke ground. However, cranes and crews are at work on several other projects in the area as demand for hotel rooms and multi-family units increases. The slideshow shows a look at some of the projects underway in the area. Click to read more at www.communityimpact.com.

Austin council members divided over hire of outside attorney in property protest rights lawsuit

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The first court date in the lawsuit between City Council and a group of citizens fighting for the right to protest property rezonings that result from the city’s ongoing land development code rewrite is less than a month away, and City Council has hired an outside attorney to defend them in court. Some City Council members, however, objected to the city spending up to $121,000 to hire Austin-based firm Scott Douglas & McConnico to argue that property owners have no formal protest rights during comprehensive revisions of the land development code. City Council Members Leslie Pool, Kathie Tovo and Alison Alter voted against the city using taxpayer money to fight against what Pool said are taxpayer interests—the right to formally protest their property’s rezoning. Council Member Ann Kitchen abstained from the vote. Together, the council members were the four nays in the 7-4 vote to approve the first reading of land development code rewrite in December. “My reason for voting against this is I don’t believe we should waste taxpayer dollars on outside attorneys to deny people the right to a valid protest,” Pool said to a handful of claps from the City Council Chambers audience Jan. 23. Click to read more at www.communityimpact.com.