Austin Real Estate Scene

CLB Partners, the company who is responsible for the Austin City Lofts and the new condo project on Town Lake called the Bridges on the Park, are planning 32-story condominium high-rise at Seventh and Rio Grande streets, extending downtown’s residential development boom.

The Austin American Statesman reported,

Pending approvals from the city, the project could get under way next spring, with its 160 units ready for residents in late 2008, said Bobby Nail, a partner in CLB’s Austin office. The city’s Downtown Commission recommended approval of the project Wednesday, and downtown neighborhood groups also support the project. Part of the land will require a zoning change and a height variance.

The new project will be built behind Katz’s Deli, an Austin landmark, and will wrap around the Ranch 616 restaurant, which would gain parking in the new project and a new 33-year lease.

“I always build around my favorite restaurants,” Project ManagerNail said. “We don’t want to change it at all.”

The project will have large balconies, a rooftop dining area, pool and spa and a personal wine-storage facility. It will include a seven-story parking garage.

Mike McGinnis, who is selling the land to CLB, will own 7,400 square feet of retail space in the project.

The high-rise is one of more than a dozen residential projects to be built in and near downtown.

Nail said the new proposed project would add more than $2 million a year to the city’s property tax base.

CLB also plans wide, tree-lined sidewalks along Seventh and Rio Grande streets.

The surge of building downtown has raised questions on whether there will be enough buyers to fill all of the proposed projects.

Nail isn’t worried, saying that the cost and difficulty of finding sites and getting the projects financed and built acts as a check against overbuilding. Those factors, coupled with soaring construction costs, “makes them very difficult to pull off,” Nail said.

Charles Heimsath, president of the Austin-based real estate consulting firm Capitol Market Research and a consultant on the CLB project, estimates there is ample demand for 500 new downtown condominium units a year. All but two of the seven projects now under construction are apartments.

There has been a lot of hype this past year about all the high rise condo projects being built in downtown Austin. There are 3000 units under production now, which means there’s going to be some excess inventory once they are all built. Plus the price points on a number of the condos is pretty high. If they build units priced from the $175,000 – $375,000 range they will sell very fast. But as Bobby Nail said, the land and soaring construction costs make for condos that are higher priced to recoup their investment.  And it’s true that not all these projects are going to get built. I see lots of financing issues and eventually if a developer sees he coup his return from a project they will jettison it. Let’s just hope they do it before they build a big hole in the ground downtown.

I’m going to go out a limb here and say that I think all the people who salivating to try and buy one of these condos before they are even built because they get in pre-construction pricing…you should wait until they are built. I think you can save more money once they are completed and they’ve been sitting on the market awhile with all the rest of the excess inventory. I’m seeing that now with some completed projects that have a number of units for sale. Contact me and I’ll send you a list of all the current inventory of downtown condos on the market now. Plus I have a new map of all the projects underway in Downtown Austin.