Austin developer Perry Lorenz remembers a time when, at the dawn of the 21st century, there was not a single high-rise residential condominium in downtown Austin.
“In our early projects,we had to educate every single buyer about what to expect, how the entire process works, and why they could trust that we would deliver on the promise,” Lorenz recalls. “A typical buyer question might be ‘How do I know you won’t run off to Jamaica with my deposit?’ Today, a typical buyer question could be ‘Tell me about the waterproofing system and the building skin, the sound transmission coefficient between units, and prove to me that the HOA will have sufficient reserves for long-term repairs.’”
That’s the difference 15 years makes.
Since 2000, downtown Austin’s condominium market has seen a significant evolution. Austin’s population growth over the past decade has included an influx of buyers of all types who are looking to live downtown, and the market has responded.
Nearly 2,500 condo units have been added to the downtown market since 2000, with more than 1,200 units currently under construction or in the planning stage. Downtown condo sales have increased 10 percent every year since 2010, said Austin real estate broker Kevin Burns.
That ongoing demand and increased competition — which includes a number of high-rise projects — has led to a maturing of the market, industry experts say, with residential projects being designed more thoughtfully and endowed with more with amenities and services.
“As ownership opportunities have expanded downtown, buyers have become increasing discerning in what they seek in a downtown residence,” said Eric Moreland with Austin-based Moreland Properties, which is marketing the 154 units in Fifth & West, a 39-story condo project under construction downtown, and the remaining units in the 56-story Austonian.
Austin-based Riverside Resources, the developer for the Fifth & West condo tower, has gone to great lengths to try to distinguish the project from the competition.
The developer even filed open records requests with the city to obtain construction documents for seven other downtown condo projects, then compiled a spreadsheet that prospective buyers could use to compare unit mix and sizes, amenities and other features.
The reasons for that are simple, said Charles Heimsath, a local real estate consultant.
“As the market becomes more competitive and developers vie for buyers,” Heimsath said, “one of the ways of making your product stand out from the rest is by increasing the number and variety of amenities that are offered.”
How we got here
Thebeginnings of Austin’s downtown condo market begin in the early 2000s, with the construction of a handful of mid-rise condo projects — almost all 12 stories or less — including the Nokonah, the Plaza Lofts, the Austin City Lofts and Milago.
Lorenz, along with the late Robert Barnstone, started construction in 2000 on the Nokonah, an 11-story luxury building on North Lamar Boulevard and W. Ninth Street. When the Nokonah opened in 2002, it ushered in a new era in residential living downtown. Over time buyers would come to include former Texas Gov. Ann Richards, then-University of Texas head football coach Mack Brown UT baseball coach Augie Garrido and former CBS news anchor Dan Rather.
Then came a boom of much taller buildings — Spring, the 360 Condominiums and The Shore — followed by projects like the condos in the W hotel, the Four Seasons Residences and The Austonian, with the latter three setting a new bar for luxury.
Of those three “ultra-luxury” projects, only The Austonian still has units left to sell. That’s no coincidence, Heimsath said, given that it has the highest prices per-square-foot among downtown condo projects.
The 23 remaining units on the upper floors are downtown’s most exclusive real estate, Moreland said.
With a full-service concierge, the most amenities per unit and the highest level of custom finishes, the tower is “in a class of its own” and “continues to be the standard by which all projects are measured,” he said.
Now the market is shifting again, with a new set of offerings that includes projects like Fifth & West and the 280-unit Seaholm Residences.
Projects in the planning pipeline include the 370-unit Independent high rise; 70 Rainey (150 units); Waller Park Place (200 units); and Proper (94 units).
At the Independent, developers are planning a 58-story tower that would become Austin’s tallest building. Units are expected to range in price from the mid-$300,000s to over $3 million. About 90 percent of the condos were reserved during the first week of pre-sales. Construction is due to start this year, with a targeted 2018 completion.
Kyle Burns, a five-year Austin resident, said he can’t wait to move in. Burns, general manager at Slate restaurant on West Sixth Street, said he and his partner have reserved a two-bedroom, 1,000-square-foot unit on the 16th floor of the proposed tower.
Citing the wide price range of the units, Kyle Burns, 28, said that “to enjoy the same amenities and to have the same prestige” as the more affluent buyers in the building “was a huge selling factor.”
‘Much more demand’
As the city’s central residential market continues to evolve, experts say they don’t see see an end in sight for the downtown condo market’s boom.
U.S. Census Bureau tallies in both 1990 and 2000 showed about 4,000 residents called downtown Austin home. Today, that number has tripled to about 12,000, according to the Downtown Austin Alliance.
Kevin Burns, the real estate broker, said 270 downtown condos were sold in the past 12 months through the Multiple Listing Service, the Austin Board of Realtors’ listings database. The average price of the 83 units currently for sale in the MLS is $918,300.
In addition, there have been more than 300 new condominiums downtown that have gone under contract for purchase in the past 12 months that were not listed in MLS, Kevin Burns said.
“The demand for well thought out, appropriately priced downtown condominiums has continued to outstrip the supply,” he said. “The more options, price points, unit types, will drive that much more demand.”
Alan Holt, a real estate broker who owns Holt Residential, said the best might be yet to come for the market.
“The most exciting thing about downtown Austin is how much potential the market still holds,” Holt said. “And with all the new residents living downtown, this is driving not only more shopping, dining and entertainment options, but also things like wider sidewalks, landscaping, and more interesting and accommodating public spaces. Downtown Austin is developing a vibrant neighborhood feel, and that is inspiring to see.”
DOWNTOWN BY THE NUMBERS
• Residential population — about 12,000
• Apartment units built since 2000 – 4,353
• Condo units built since 2000 – 2,479
• Apartment units currently under construction – 1,183 (plus another 472 just south of Lady Bird Lake)
• Condo units under construction – 442
• Apartment units in planning pipeline — about 1,075 (Plus several hundred more just outside downtown)
• Condo units in planning pipeline — about 725
Sources: Downtown Austin Alliance, City of Austin Emerging Projects