The considerable economic growth seen by Austin, the Texan state capital, is the driving force behind the city’s real estate development. A population increase, brought about by the city’s new nickname ‘Silicon Hills’, is thanks to the influx of budding technology companies causing a shift in the city’s image.
Austin’s appeal is its delightfully bohemian lifestyle cultivated by a population of artists, musicians and, more recently, entrepreneurs. The population influx led by these companies and individuals has been coupled with their investment into the social and real estate infrastructure of the city.
Investment into residential and commercial real estate has risen in recent years in tandem with a significant rise in office rents. Consequently, Austin’s skyline is changing.
In the Central Business District (CBD), developers have seized the opportunity to create new business and residential spaces right in the heart of Austin. These developments facilitate the migration of larger companies, either established or rapidly growing, into these premises, while medium sized companies have emerged to fill spaces left behind.
Austin is demonstrating signs of a healthy business economy, but what does this mean for investors and homebuyers? For the developers and investors in the new Austin skyline, there is promise. Downtown office rents up 80% in 2019 and with strong demand for modern office space amongst some of the largest companies within their respective industries, rents could increase further over the coming years. Class A office space in the CBD averages just over $54 per square foot, a 7.4% increase from 2018. The Metro area too has seen a 5.2% increase and with unemployment at a drastically low figure of 2.6%, Austin’s economy is looking strong for 2020 and the future.
With a changing skyline, we have taken a look at some of the initiated and planned projects for 2020 and near future. Here are some of our favourites:
Aptly named the Innovation District, Austin is stamping its mark on the technology industry landscape of the United States. With the University of Texas cultivating outstanding academia, investment into innovation and producing some of the brightest graduates in the state, companies have to market themselves to recruit this top talent. The tower, standing at 17 storeys as the flagship for the Innovation District, will cost around $160 million. The Dell Medical School of UT has pre-leased the majority of the building with some units still available for private offices.
Block 185 sits abreast with Lady Bird Lake, Austin’s main water feature heavily utilised by the public during the summer months. Undoubtedly the sail-design, 35 storey architectural endeavour will capture the eye and for residents, will provide stunning views of the surrounding Texan landscape. At 723,000 square feet of office space, Google has already pre-leased the entirety of the building for some 5000 prospective employees. Whilst it is unclear how quickly Google will populate the building, the construction should begin imminently with operational use to begin in 2023.
With construction due to start sometime in 2020, this 66 storey will replace the existing Extended Stay America Hotel on the corner of 6th Street and Guadalupe. This prime spot will be home to Austin’s tallest tower and sport a mixture of both commercial and residential properties. With 349 luxury condos, 589,661 square feet of office space and over 11,000 square feet of retail space, this is certainly a statement of Austin’s future - luxury, modern living, sleek architectural, office space and high-end retail all in one prime location.
The investment in Austin’s CBD is evidently transforming the city’s already impressive skyline. For the average resident of Austin, this level of investment in luxury residential, commercial and retail spaces is bringing an increase in house price long term and an elevated level of amenities, which in turn attracts wealthy investors and residents alike. Zillow recently named Austin as the hottest housing market nationwide in the US. The survey, conducted through 110 real estate experts and economists, predicted by majority that Austin’s Metro area housing market will grow faster than the national average of 2.8% this year.
If you want to learn more about how investing in the hottest housing market in America is great for you, contact us at Propeterra today and we would be happy to talk through the great opportunities we have available in Austin, Texas. Propeterra, the truly global real estate advisory company.