Three Deals in 30 Days

KW Commercial's Jim Young (here with 9-month-old Morgan and 3-year-old Catie, he's in the center) says the properties were in escrow for about three to four months prior to closing, but if you know land deals, 120 days from contract to close is still pretty darn quick. The deals include Trails at Walnut Creek Apartments, 2440 Wickersham (the seller was repped by Chris Gamel), and 2714 E Cesar Chavez. The duo has another 100-unit complex under contract for an international client, which should close in the next 45 days. Next up: putting offers on several other apartment complexes in San Antonio and Round Rock in the next 10 days. Fun fact about the deal: Jim was taking his CCIM test when the deal closed. He passed, he tells us. Nick must have mentored him as he'll be the Central Texas CCIM chapter prez next year.

Jim tells us the back story to the sale of Trails at Walnut Creek Apartments was a little unorthodox. Nick and Jim repped the buyer and approached the owner, who was not looking to sell. The aggressive pricing and the rising rents near the Domain Shopping Center really attracted the buyer to the deal. (Plus, when you have the opportunity to buy a gazebo you're not gonna pass it up.) Bonus: about a week before closing the deal, the owner learned that Kerbey Lane is building a new restaurant right around the corner. Who wants to join us for a Hipster Burger and sweet potato fries? We promise, no hipsters were injured in the making of this burger.

Jim says he and Nick (pictured) are getting calls every week from buyers in New York City to LA, along with international investors all looking to the Austin market for deals. And, the flow of transactions is increasing in speed and volume, Jim says. The continued stability of job growth in Austin, combined with its low cost of living (compared to the rest of the country), creates a gravitational pull to this area that's magnified by the friendly business environment and mild weather. After going to college at West Point in New York, Jim doesn't miss being frozen and looking at gray skies for months at a time. 

Office rents are spiking impressively (like a good left-side hitter on a volleyball team), Endeavor managing principal Chad Marsh said at our recent  Austin State of the Market event. He's working three leases now that include 20% to 40% increases bringing them from the high $3 or low $4 range to nearly $6/SF. Endeavor has launched 1.1M SF of spec office in the last 12 months, and will kick off another building in three months.

Westmount Realty EVP/partner Steve Kanoff bought 537k SF Braker Center at 88% leased in March. Rents there were sub $10, but now are going up to $15 as it reconfigures the property from industrial to office.

Parkway managing director Mike Fransen (who grew up in southern Oregon) says Downtown core office rents are in the mid $20s and growing quickly, but operating expenses are even more staggering. Including parking, they can top $50 in the submarket. (Parking also increases our expenses, because we keep getting tickets.)

Cadence McShane VP/GM Srinath Pai Kasturi offered his investment advice: Start purchasing land on the 130 corridor before the next recession (we average one every six years, so you're running out of time). Then develop mixed-use with a heavy focus on multifamily.

IndCor SVP Ryan Keathley criticized the City leadership for failing to fix traffic, one of Austin CRE's biggest challenges today. (If you spend as much time in your car as you do in your office, you probably live in Austin.) He says new roads and rail aren't enough; any transportation plan needs to include the improvement of IH 35.

Many thanks to our moderator Gracy Title SVP Bob Roberts (brown jacket) for wrangling our rowdy office and industrial panel. He called it a microcosm of Austin today: Two Longhorns and a bunch of outsiders.

We snapped our sponsor Clean Scapes' Jeff Pulley with TBG's Justin Lindabury. Clean Scapes is Central Texas' leader in sustainable landscape construction and maintenance. You'll recognize some of its big projects, including much of the Domain (it's handling the 2, 7, and 11 renovations now), The Austonian, Hill Country Galleria, and Block 21 W Hotel.