Amid apart­ment boom, work starts on 36-story tower

The 358-unit build­ing go­ing up on Bowie Street joins the boom in lux­ury rentals.

Austin American-Statesman - - FRONT PAGE - By Shonda No­vak sno­vak@states­ De­vel­op­ers have bro­ken ground on The Bowie, a 36-story mixed use project that will have 358 apart­ments. CONTRIBUTED BY HKS AR­CHI­TECTS

De­vel­op­ers broke ground this week on a 36-story tower that will add 358 lux­ury units down­town when it opens in 2014.

In the lat­est sign of the on­go­ing apart­ment build­ing boom in Cen­tral Texas, de­vel­op­ers broke ground this week on a 36-story tower that will add 358 lux­ury units down­town when it opens in 2014.

In ad­di­tion, two other apart­ment projects are due to start soon down­town. And just south of down­town, two more mul­ti­fam­ily projects re­cently started con­struc­tion.

The apart­ment mar­ket has been the strong­est sec­tor of the re­gion’s real es­tate mar­ket for some time, spurred by de­mand from the re­gion’s job and pop­u­la­tion growth and a lag in sup­ply as fi­nanc­ing for projects dried up dur­ing the re­ces­sion.

But as lend­ing loos­ened up some­what within the past cou­ple of years, de­vel­op­ers re­vived stalled projects, or be­gan plan­ning and build­ing new ones, with a num­ber of them in or near down­town.

The new­est down­town project to start is The Bowie, which is be­ing devel­oped by Austin-based En­deavor Real Es­tate Group and the Lynd Co., based in San An­to­nio. Along with apart­ments, the project — on Bowie Street near West Fifth — will in­clude 40,985 square feet of of­fice space and 3,890 square feet of restau­rant space, said Jamil Alam, a man­ag­ing prin­ci­pal with En­deavor.

En­deavor and Lynd are not dis­clos­ing a price tag for the project, which Alam said is ex­pected to open in the third quar­ter of 2014.

Other up­scale apart­ment tow­ers un­der con­struc­tion down­town in­clude a sec­ond phase of Gables Park Plaza (222 units in an 18-story tower); the Whit­ley, which will have 277 units in a 16story tower; and Sky House, a $67 mil­lion project that will fea­ture 320 apart­ments in a

23-story sky­scraper on Rainey Street.

Two projects due to break ground soon are a 24-story tower with 221 units slated to rise at West Sev­enth and Rio Grande streets, and Street­Lights at Barton Springs, 300 units in a 19-story tower to be built near the Hy­att ho­tel.

Tom Blakewell, chief fi­nan­cial of­fi­cer with Dal­las-based Street­Lights Res­i­den­tial, said the com­pany closed on the land pur­chase last week from Cres­cent Re­sources.

“We will be clos­ing the con­struc­tion loan within the next few days, with con­struc­tion com­menc­ing by year end,” Blakewell said. The project will be built at a cost of about $70 mil­lion, he said.

Hun­dreds more apart­ment units are ex­pected to be added in the next few years as part of re­de­vel­op­ment of the Sea­holm Power Plant and Green Water Treat­ment Plant sites on down­town’s west side.

East of down­town, three projects are un­der way that trans­form the East River­side Drive area with hun­dreds of new up­scale apart­ments.

Just south of down­town on Barton Springs Road, Mill Creek Res­i­den­tial Trust has started mov­ing dirt on the Zilker Park Lofts. The project, just west of Chuy’s restau­rant, will have 213 apart­ments in a five-story build­ing that is due to open in the spring of 2014, said Nikelle Meade, an Austin at­tor­ney for Mill Creek.

East of Chuy’s restau­rant, work is well un­der way on Cold­wa­ter, which will bring 225 apart­ments to mar­ket.

Nearby, on South La­mar Boule­vard, the Hanover Co. has bro­ken ground on a 340-unit lux­ury apart­ment project south of Uchi restau­rant. Rents are ex­pected to start in the $1,900 to $2,000 a month range. The first units should be ready by the late spring of 2014, with the project wrap­ping up that fall.

Nearby, de­mo­li­tion work is on­go­ing at the former La­mar Square shop­ping cen­ter at La­mar and Tread­well to make way for a mixe­duse project be­ing devel­oped by Greystar that will in­clude 440 up­scale apart­ments.

Some res­i­dents who live in neigh­bor­hoods around Barton Springs Road and South La­mar have ex­pressed con­cerns about the in­creased traf­fic they say all the projects will gen­er­ate.

Meade, how­ever, said: “We’ve al­ways said our tar­get res­i­dent is a per­son who isn’t go­ing to choose to use their car ev­ery day, and that’s why they’re will­ing to pay a pre­mium to be in such close prox­im­ity to down­town.”

The hope is that the projects will en­cour­age alternative modes of trans­porta­tion as well as en­hanced bike lanes and road im­prove­ments to help with the flow of traf­fic and pedes­tri­ans in the area, Meade said.

Austin area apart­ment rents and oc­cu­pan­cies hit record highs this year, ac­cord­ing to Capi­tol Mar­ket Re­search, an Austin-based real es­tate con­sult­ing firm.

Charles Heim­sath, the firm’s pres­i­dent, said re­cently that the de­mand for apart­ments down­town is “ex­tra­or­di­nary,” not­ing that down­town units were 97 per­cent oc­cu­pied, and at rents that are more than twice the city av­er­age. The av­er­age rent down­town is $2,257 a month, Heim­sath said .

Meade said she thinks apart­ment mar­ket de­mand will re­main strong through 2013. “I’m not fore­see­ing it’s go­ing to di­min­ish at all,” she said.

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