The first new tower in more than two years has opened in downtown Austin, amid a wave of new apartment construction that underscores continued strong demand for downtown living. The first tenants recently moved into Whitley, a 16-story project with 266 apartments at Third and Brazos streets.
And more units are coming, with construction under way on four other projects that will add another 1,121 apartment units to the central business district within the next two to three years: the 320-unit, 23-story SkyHouse tower on Rainey Street; the Bowie, a 36-story tower at 311 Bowie St. that will have 358 units as well as office space; an 18-story Gables Residential project with 222 apartments next to the former Seaholm Power Plant site; and a 24-story tower with 221 units that Behringer Harvard is developing at West Seventh and Rio Grande.
The surge in construction comes as demand for downtown living remains robust , experts say. Downtown apartment occupancies reached their highest level on record, 98.3 percent as of late February, according to Capitol Market Research, an Austin-based real estate consulting firm.
Downtown rents averaged $2,308 a month, with the average unit size being 991 square feet, said Charles Heimsath, the firm’s president.
“Ninety-eight percent occupancy at $2,300 a month — I would call that extraordinary demand,” Heimsath said. And even with the multiple apartment towers in the works, their projected openings are “spaced out enough so that I don’t think we’ll encounter an overbuilt situation,” he said. “Downtown is such an exciting place in Austin,” said Michael Lynd, CEO of San Antonio-based Lynd Co., which is developing the Bowie along with Austin-based Endeavor Real Estate Group. “I travel around the country a lot, and there isn’t really a business person I talk to, when I tell them I’m from Texas and we’re based in Texas, that doesn’t immediately start talking to me about Austin. It’s on people’s radar screen nationally.”
Whitley, the first of the latest tide of towers to come to market, is part of a resurgence of development in the area south of Congress between Second and Third streets. A Hyatt Place hotel opened in March across the street, and a 1,012-room JW Marriott convention center is under construction near the Whitley project.
Along Third Street, sidewalks have been widened to encourage pedestrian use, and there are two dedicated bicycle lanes that are part of the Livestrong bikeway. Eventually, the city intends for Third to be a walkable thoroughfare linking the nearby Convention Center with future mixed-use developments planned for the former sites of the Green Water Treatment Plant and the Seaholm Power Plant on downtown’s western edge.
All of that fits in with developers’ vision for Whitley, which hopes to draw residents who work in downtown office buildings and want to be walking distance to shopping and dining options. Austin-based development firm Riverside Resources, which broke ground on the apartment tower in October 2011, named the project for the printing company that the site housed for more than half a century. Riverside Resources officials visited residential towers in Portland, Chicago, Atlanta and Washington, D.C., to get ideas for amenities in their Austin project. They said they returned with some new touches believed to be a first for downtown Austin high-rise apartment buildings, such as a dog park and grooming station, oversized private garages, controlled-access storage for bicycles and suites that residents can reserve for overnight guests.
Rents at the Whitley will average $2,800 a month, said Rita Anderson, community manager with Greystar, the national firm hired to lease and manage Whitley. The range will be from $1,600 a month for a 525-square-foot studio to $4,400 a month for the largest penthouse unit with 1,378 square feet, Anderson said.
The building is currently about 25 percent leased, with 28 residents already having moved in. All work on the building is expected to be completed in late June or early July, and Greystar hopes to have it fully leased in about 14 months, Anderson said.
Whitley includes about 12,000 square feet of retail space, all of which is already spoken for, Anderson said. Uncle Julio’s, a Mexican concept out of Dallas, will open a 10,000-square foot restaurant, while Austin-based Royal Blue Grocery, which has several locations downtown, plans a 2,300-square store.
Craig Staley, co-owner of Royal Blue Grocery, said the chain is “excited to be going into the first residential project to come on line in downtown in the last couple years.” He said the location “will put us in the heart of the hotel and Convention Center district.”
Higher-end amenities will also be a focus of the other four apartment towers now being built.. At the Bowie, for example, amenities will include a clubroom and outdoor deck on the 31st floor; a landscaped deck with a dog run on the 10th floor; and a rooftop pool the developers say will be Austin’s highest swimming pool.
Projected rents for the units, which will range in size from 448-square-foot studios to three-bedrooms with upwards of 2,000 square feet, aren’t yet being disclosed. However, Michael Lynd, CEO of codeveloper the Lynd Co., said his firm is “very confident we’re going to deliver a very high-end product that will be very well received.”
“If we have any worries at all, it is the depth of the market — how many of these high-end units can be absorbed downtown,” Lynd said. But he noted that the project’s location, near Shoal Creek, Whole Foods Market’s flagship store and headquarters, and numerous bars and restaurants, will be a “huge competitive advantage.”
“Certainly,” Lynd said, “we like where we’re positioned right now.”
The multiple downtown apartment projects are attracting renters from various demographic segments, but primarily they are drawing young professional singles and couples, Heimsath said. “There’s a willingness to pay a higher percentage of their income in rent in order to buy the lifestyle that living in downtown affords,” Heimsath said.
Among those are Ernest Reyes and his partner, Matt Petrone, who moved into their apartment on the sixth floor of the Whitley in early March. The third occupant is Maxine, a 16-year-old border collie/cattle dog mix.
Reyes, an electronic medical records consultant, and Petrone, who works in information technology for Austin Regional Clinic, reserved their unit sight unseen.
“We didn’t tour it until a week after we put money down,” Reyes said. The rent for their 1,200 square foot, north-facing unit is in the $3,000 range, including parking.
Like Reyes and Petrone, Danielle Brown said she rented her 8th-floor Whitley unit sight unseen, and on Feb. 22 became the first person to move into the building.
Brown, who moved back to Austin in September after a stint in Utah, said she checked out other downtown apartment projects before settling on Whitley. It’s near her job at Fifth and Brazos, where she is a consultant who helps Fortune 500 companies manage their litigation.
“I looked at the floor plans,” she said, “and working two blocks away from where I live just sounded divine,” she said. “Everything about living there has been a delight.”