Texas Real Estate Business magazine covers the multifamily, retail, office, healthcare, industrial and hospitality sectors in Texas.
Issue link: https://texasrealestatebusiness.epubxp.com/i/591312
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DRAWING FROM 300,000+ POPULATION IN RETAIL TRADE AREA 60% OF RETAIL SALES COME FROM OUTSIDE OUR 5-MILE RETAIL ZONE • SITES AVAILABLE AT GREENVILLE TOWNE CENTER, A 66-ACRE POWER CENTER LOCATED ON I-30 FRONTAGE ANCHORED BY SPLASH KINGDOM WATERPARK • PADS READY AT KARI BETH CROSSING, WHERE MORE NATIONAL RETAILERS ARE COMING TO THE I-30 HARD-CORNER CENTER • COMPLETE REDEVELOPMENT UNDER WAY AT CROSSROADS MALL — 100% PRE-LEASED TO NATIONAL BRAND RETAILERS greenvilletxedc.com • 903-455-1197 • gsims@ci.greenville.tx.us *5-mile radius retail sales (esri 2015) Phoenix are generating the strongest rates of new demand (net absorption) relative to the size of their respective markets, making conditions more competitive. "There's simply not enough supply for the demand. Of the 669,842 square feet under construction in the CBD at the end of the second quarter of 2015, 37.2 percent is pre-leased," says John Gump, vice president with CBRE. "That's a great indicator of the level of demand right now. On a monthly basis, we're seeing record-breaking rental rate comparables in the CBD." Increasingly, tech companies are choosing the CBD because of the generational demands of its younger workforce and accessibility to their peers. As the competition to recruit and retain talent continues to heat up, employers consider the entire em- ployee experience when selecting an ofce location. The CBD has a great combination of retail, restaurants, en- tertainment, living options and access to the natural amenities that make Austin so unique. "Companies are drawn to the CBD's vibrant urban mix of local restaurants, live music, improving retail along Sec- ond Street and proximity to Lady Bird Lake Hike and Bike Trail," says Ka- tie Ekstrom, frst vice president with CBRE. "With the continued revitaliza- tion of downtown, amenities are an extension of the ofce space and walk- ability is a key feature for all ages." Sought-After Amenities Like many other downtowns across the U.S., Austin is challenged by a limited number of sites available in the CBD. Developers looking for op- portunities to build must imagine and explore every approach and design to successfully deliver a project, often undertaking a renovation or recon- struction to achieve this goal. Features like large ground foor lob- bies and granite exteriors, considered luxury in decades past, are now be- ing replaced with active retail at the ground foor and exterior terraces available to tenants. For new product coming online, great views, high ceil- ings, top-of-the-line ftness facilities and built-in social spaces are some of the amenities and fnishes that make an ofce building competitive. "Large foor plates are in high de- mand due to the steady shift to open foor plans," says Ekstrom. "Flexible workspace and an allowance for ten- ants to have denser footprints is be- coming increasingly important. For example, [Trammell Crow Co.'s] 500 W. 2nd St. has a third stairwell, which increases occupancy capacity and al- lows for more fexible foor plates." 500 W. 2nd Street, a 489,403-square- foot, Class A speculative ofce tower with 11,033 square feet of ground foor restaurant/retail space, is downtown Austin's newest ofce tower and a model for the next generation of ofce space. In partnership with the City of Aus- tin, the project — scheduled to be complete early 2017 — is designed to bring a new vibrancy to Austin's CBD and the Second Street District. The tower will ofer some of the larg- est foor plates in downtown Austin, averaging 32,500 square feet, plus seven outdoor terraces on six diferent levels, a ftness center and a 14th foor fexible conference center and great room overlooking Lady Bird Lake. In addition, 500 W. 2nd Street fur- thers its eforts to be a competitive location for tenants by featuring Aus- tin's frst elevator destination control system, optimized for people fow and designed to save vertical transporta- tion time by adding efciency. The development team is seeking LEED Gold certifcation and an Austin En- ergy Green Building 2-Star rating. Keeping Sense of Place Looking forward, we expect to see a continuation in the migration back to Austin's CBD. With total down- town vacancy averaging 10.2 percent, the city's ofce vacancy is the tightest amongst state major metros. There are three projects under construction in the CBD totaling 669,842 square feet, and demand appears to be high for those buildings. As a further tailwind, Austin leads national and state levels in unemploy- ment at 3.1 percent and both job and population growth remains strong in the area. As mentioned in PWC/ ULI's 'Emerging Market Trends' the one concern expressed by many mar- ket participants is the lack of infra- structure investment to keep up with growth. Afordability also remains a major concern as it relates to the city's housing stock. Austin is rare, quirky and exclu- sively ours. As the Downtown Austin Alliance says, "home to the world's largest urban bat colony and stat- ues of both Stevie Ray Vaughan and Willie Nelson, downtown lies at the crossroads of wild and weird. A magi- cal mix of entrepreneurs and artists means one-of-a-kind businesses, events and experiences fourish left and right." It is imperative that Austin doesn't lose that sense of place, and we be- lieve that the next generation of de- velopment in downtown will evolve to ensure that this incredible mix of uses and experiences can be enjoyed by a greater density of people and companies.