Economic Upturn Reinvigorates Development
There are construction projects that have been in some stage of development for five or six years. Photo by Jessie Wang/KUT NewsAudio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.
Before the downturn in 2008, the Austin area had about 12,000 residential units aggressively seeking construction financing. Things took a turn for the worse, but several projects in Austin are springing back to life now that the recession is behind us.
KUT’s Nathan Bernier spoke with Tony Quesada – managing editor of the Austin Business Journal – about this trend, which was the subject of an in-depth ABJ piece this week by Cody Lyon.
Tony Quesada:
Some of these projects have been in some stage of development for as many as five or six years. Particularly, the closer you get to downtown, the ability to get financing for these has come back. That was really what put these projects into their dormant state in the first place.
There is huge demand for multifamily apartments. Citywide occupancy rates are about 97%, which is about as high as it really can go.
The further you get out [of the city’s urban core], the more you may have to be creative in respect to your financing. You may have to get some private investors involved and other types of financing instruments, as opposed to straight debt financing. It can be done, though. There are people who are interested because citywide it’s still a good market for apartments.
Cody Lyon’s article took a close look at three projects in particular: Genesee (South 1st Street), the Lakeshore Project (just south of Lady Bird Lake) and District at SoCo (East Oltorf Street).
Visit the Austin Business Journal’s website for more about this subject.
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