Economic Forecast for 2019
Noteworthy Developments in the Past Year:
Robinson Ridge was a tract of land that was recently bought by Apple. Apple is building 12 buildings on 147 acres. Apple agrees to bring in 4000 jobs to get their incentives. They will likely add 15,000 jobs over the next 12 years.
Austin FC soccer stadium - a 240M stadium. 20,500 seats in it.
There is a 19 story office tower planned with retail along Burnet Rd.
Rutland Drive, an area of north Austin that is not historically known as an entertainment district, is now home to over 5 breweries with more planned.
The 3M plant off 183N and Parmer is planned to vacate the property with 120 jobs
Just north of there is the Parmer Innovation Center. It already has big name tenants such as Home Depot Tech Center (reference photo for more)
Just east of there is a planned community called East
450 single family homes, grocery store, amphitheater
The Broadmoor site near Top Golf is right next to an Amazon site a site with 66 acres owned by Brandywine.
Charles Schwabb Grady Farms location is also right near here. Last year they added 250 new digital and tech jobs.
The Charles Schwabb campus they are building now will have room for 2,300 people, making it one of the biggest tech employers in the city.
Tony James bought 3 buildings in an industrial complex valued at 31M. They bought it for $27M three years ago and just sold it for $41M
Development in The Domain
Across Mopac from The Domain was bought by several large developers that plane to develop the lots.
Four new buildings are being built in the domain. HomeAway is occupying one, Facebook another, and Amazon another. The HomeAway building is almost complete. Each building is 320,000 square feet.
There is a large parking lot north of Nordstrom that is planned for two towers, Domain 14 and 15. After Endeavor builds that, they will build Domain Point.
Developer Stonelake Capital plans on building another building Domain Tower 2 and 3 that is about to start construction. They are also planning another 23 story tower next to that.
All together, the Domain is truly another Silicon Valley.
The Panelists @ Summit
Regional Mobility Authority
Austin Regional Director
The HT Group
If you could summarize the activity in North Austin...
"Explosive” according to Marc. He recently had an executive from San Francisco come in and was truly astounded with what’s happening in North Austin.
3 stories about leasing companies CBRE has helped secure 3 huge leases in North Austin
The first one was an international publishing company that was in downtown Austin for 10 years...
They were concerned that their employees were moving further away from downtown because the cost of living had risen. The center had actually moved north and that lead them to want to center north of downtown. But they wanted their employees to have the same area amenities that the employees were used to, like walkable amenities such as restaurants and bars. They found that The Domain was a great alternative that had housing nearby that was much more affordable and the office space is less expensive than downtown.
Another company they represented was another central business district that wanted to expand but keep their core office office outside of downtown Austin.
Another company was a Fortune 500 company that did not have an office in downtown but did in the Domain.
They wanted to be able to expand and picked the domain in order to have a workplace to compete with the likes of Facebook, Indeed and other giant tech companies.
The Apple Deal in December in North Austin
This caused an immediate jump in sales and leasing all over North Austin. It was a huge event to happen in Austin real estate. Marc again - in the middle of 2018 he got a call from a colleague in Palo Alto that said they represented a company in the West Coast that is looking in Charlotte, Austin and two other cities to expand their workforce. CBRE helped with providing data. The other cities did the same. Typically when this happens, the company studies the data and then comes in to tour the city and available sites and existing buildings and takes a great deal of time to decide their next move. CBRE provided the data and, in this case, within a week of Apple’s announcement, this company skipped the preliminary due diligence of planning a trip. The Apple announcement alone was a big enough event for this big company to make a decision. This company is a “move the needle” company. Marc says “Apple isn’t doubling down, they’re tripling down on Austin.”
Comparative States of Commercial Space of North Austin to Central Business District
Central business District has a vacancy rate of 5.8% which is exceptional in commercial.
Class A costs is averaging $54 a foot but that does not include parking which makes it much more expensive.
In Northwest ta Class A building is averaging $41.74 and that DOES include parking.
There is still VERY strong demand in downtown Austin will continue to be but there is a big trend of growth to North Austin, lead by great costs savings corporations.
The Impact of Residential Home Sales in North Austin
The future Apple campus is located near Parmer and 45. New homes are starting to move east of Pflugerville, and along Cedar Park, east of 183. And north of Pflugerville and east of Round Rock towards Hutto.
Indigo Ridge is a mixed use planned east of Cedar Park.
The excitement around Apple is not just in commercial but also in residential as we see here.