Austin-based Endeavor Real Estate Group released new details about a planned 36-story tower downtown to the American-Statesman, including that it has lined up the equity for the mixed-use project and has brought the Lynd Co. on as a development partner.
Endeavor and Lynd , a family-owned national real estate company based in San Antonio, plan to break ground on the tower in September, with the first of its 358 apartment units ready for tenants _by third quarter 2014. The project is called 3 eleven Bowie, after its address near West Fifth and Bowie streets.
Equity is being provided by an undisclosed institutional investor, said Jamil Alam, a managing principal with Endeavor. Endeavor and Lynd officials are in the market to raise the construction debt needed for the project.
Endeavor declined to release the project's estimated cost.
The building will include about 42,000 square feet of office space and 3,000 square feet of retail space. Endeavor, whose projects include the Domain and Southpark Meadows, plans to move its offices into the new building.
The project comes amid a booming apartment market in Central Texas, where hundreds of units are planned or under construction. Apartments are the hottest sector of the region's commercial real estate market.
Alam and Michael Lynd Jr., Lynd's CEO, struck a deal in the summer of 2011 to form a joint venture to develop the Bowie site, which Endeavor had previously placed under contract.
In a statement, Lynd said the tower will be "one of the finest luxury residential rental buildings in all of downtown Austin."
"This is a special project with a fantastic location," he said.
Lynd's involvement comes on the heels of a successful apartment tower that the San Antonio-based firm developed in Chicago called EnV. Located one block from the Chicago River, the 29-story, 249-unit apartment tower won the 2011 "High-rise of the Year" from Multifamily Executive magazine and became the highest grossing for-rent building in the city, Lynd officials said.
Alam said the area where the Austin project is planned, known as the Market District, "has evolved into the premiere high-rise residential location within the city," which also includes two other residential highrises, the 42-story Spring condominium tower and the 29-story Monarch apartment building.
The area is home to Whole Foods' flagship store and headquarters, HomeAway Inc., GSD&M and a new headquarters under construction for Cirrus Logic.
Alam said Endeavor, along with Perry Lorenz and Larry Warshaw, who are selling the land to Endeavor, will convey an easement to the city on the eastern side of its project to close a gap in the hike-and-bike trail.
"The combination of views, proximity to Whole Foods, ease of access to the hike-and-bike trail and the walkability to the core of downtown make this a very special site, and we believe that 3 eleven Bowie will set the new standard for high-rise multifamily living in Austin," Alam said.
Downtown's apartment occupancy rate stood at 97.6 percent in June, and rents averaged $2.17 per square foot, up 6.9 percent from December 2011, according to Capitol Market Research, a real estate consulting firm that tracks the apartment market. Rents at the newer high-rise projects are higher, averaging in the $2.50 to $2.60 per square foot range.
"Demand is at least 500 units per year, and could be higher," said Charles Heimsath, president of Capitol Market Research.
There are two apartment projects under construction downtown that will add about 485 units, Heimsath said. Several other projects are planned downtown that if built would add hundreds of additional units.
MPF Research, which tracks rents and occupancies in Austin and other cities nationwide, has forecast that Austin;s apartment market will be the nation's No. 2 performer this year, just behind San Francisco.
"Austin likely can pretty easily digest the apartment additions under construction now," Greg Willett, vice president of research and analysis at MPF Research, said by e-mail. "If delivery timing gets spread out, completion volumes don't look like they will be a problem, but all of those projects hitting the market in a short time frame would lower occupancy quite a bit."
Rents have not been disclosed for the units, which will range from 427 square feet to 2,405 square feet.
Endeavor and Lynd's tower is being designed by the Dallas-based architecture firm of HKS Inc. HKS also designed the 36-story Ashton apartment tower in downtown Austin and was the architect of record for Frost Bank Tower.
Endeavor's planned tower became the first major test of a city ordinance to preserve heritage trees. The Austin Planning Commission rejected the developer's request for a variance to remove a 57-foot pecan tree to accommodate the project. Endeavor said it has a permit to relocate the tree elsewhere on the site.
Jim Duncan, a former city planner who opposed the removal of the tree, said preserving trees while adding density and ensuring financial returns for developers aren't mutually exclusive.
"We can design with nature in this town and get the same economic return," Duncan said. "We need to understand we need to blend the green with the gray. Preserving trees on some of these sites will enhance the property and make it a more livable site."