NORTH LAMAR TOD DEVELOPMENT SITE | AUSTIN, TX 1.86 AC DEVELOPMENT OPPORTUNITY LOCATED AT 6705 & 6701 N. LAMAR
DOWNTOWN
LAKE AUSTIN
UT CAMPUS THE TRIANGLE
KOENIG LN
HIGHLAND
MALL N LAMAR BLVD LAMAR N
AIRPORT BLVD SITE
OFFERING SUMMARY AUSTIN, TEXAS DISCLAIMER CONTENTS This Offering Memorandum has been prepared by HFF for use by a limited number of recipients. All information contained herein has been obtained from sources other than HFF, and neither Owner nor EXECUTIVE SUMMARY 3 HFF, nor their respective equity holders, officers, employees and agents makes any representations or warranties, expressed or implied, as to the accuracy or completeness of the information contained INVESTMENT HIGHLIGHTS 4 herein. Further, the Offering Memorandum does not constitute a representation that no change in the business or affairs of the property or the Owner has occurred since the date of the preparation of LOCATION OVERVIEW 6 the Offering Memorandum. All analysis and verification of the information contained in the Offering Memorandum is solely the responsibility of the recipient. HFF and Owner and their respective APARTMENT MARKET OVERVIEW 10 officers, directors, employees, equity holders and agents expressly disclaim any and all liability that may be based upon or relate to the use of the information contained in this Offering Memorandum. AUSTIN ECONOMIC OVERVIEW 12
Additional information and an opportunity to inspect the property will be made available upon written DEAL CONTACTS request to interested and qualified prospective investors.
GARRETT GILLELAND Owner and HFF each expressly reserve the right, at their sole discretion, to reject any or all Director expressions of interest or offers regarding the property and/or terminate discussions with any entity at any time with or without notice. Owner shall have no legal commitment or obligations to any 512.532.1968 recipient reviewing this Offering Memorandum or making an offer to purchase the property unless [email protected] and until such offer is approved by Owner, a written agreement for the purchase of the property has been fully executed, delivered and approved by Owner and its legal counsel, and any obligations set SEAN SORRELL by Owner thereunder have been satisfied or waived. Senior Managing Director T: 512-532-1924 The recipient (“Recipient”) agrees that (a) the Offering Memorandum and its contents are confidential [email protected] information, except for such information contained in the Offering Memorandum, which is a matter of public record, or is provided from sources available to the public (b) the Recipient, the Recipient’s SPENCER ROY employees, agents and consultants (collectively, the “need to know parties”) will hold and treat it Associate in the strictest of confidence, and the Recipient and the need to know parties will not, directly or 512.532.1977 indirectly, disclose or permit anyone else to disclose its contents to any other person, firm, or entity [email protected] without the prior written authorization of HFF and the Owner, and (c) the Recipient and the need to know parties will not use or permit to be used this Offering Memorandum or its contents in any fashion or manner detrimental to the interest of the Owner or HFF or for any purpose other than use SCHAFER SMARTT in considering whether to purchase the property. The Recipient and the need to know parties agree Analyst to keep this Offering Memorandum and all confidential information contained herein permanently 512.532.1971 confidential and further agree to use this Offering Memorandum for the purpose set forth above. If [email protected] the Recipient has no interest in the property, or if in the future the Recipient or owner discontinue such negotiations, the Recipient will return this Offering Memorandum to HFF. EXECUTIVE SUMMARY HFF has been exclusively retained to offer qualified investors the unique opportunity to acquire 6701 and 6705 N Lamar (the “Property” or the “Site”), a 1.86-acre infill transit orient development site with a premier urban address in Austin, Texas. Prominently positioned along one of Austin’s top growth corridors (North Lamar Boulevard), providing quick access to Interstate Highway 35 and US Hwy 183, the Property offers superior connectivity to Downtown, the Northwest Austin tech hub, key business centers and attractions throughout the city. This site benefits from its close proximity to the new Highland Mall Redevelopment, The Triangle and The Domain – Austin’s second downtown, as well as the wide array of amenities found along the recently revitalized Anderson Lane and Burnet Road corridors. The Property presents investors with an unmatched opportunity to purchase a well-located site in one of Austin’s most dynamic submarkets.
PROPERTY SUMMARY
Location 6701 & 6705 N Lamar Boulevard Site Area 1.86 Acres Zoning TOD - Lamar/Justin Impervious Cover 95% Max Height 60’ FAR Unlimited w/ Density Bonus
EXECUTIVE SUMMARY 3 NORTH LAMAR TOD DEVELOPMENT SITE INVESTMENT HIGHLIGHTS Average HH income DO NTO N STRONG SUBMARKET FUNDAMENTALS $96,944
M ELLER AIRPORT • The North Lamar corridor benefits from being in one of the foremost infill submarkets in the metro area with immediate access to major transport REDE ELOPMENT arteries and employment hubs. The North Central submarket has enjoyed repeated quarters of growth in absorption, rental rates and occupancy. H DE PAR UT AMPUS NEI H ORHOOD • Class A properties in the North Central Submarket are averaging rents at $1,500 as of the third quarter 2018.
• The supply/demand dynamic is also strong as 961 units were absorbed while 910 units were delivered over the last 12 months. TRIAN LE
PRIME NORTH CENTRAL LOCATION
• Strategically positioned in the path of growth equidistant (15 minutes) from Austin’s most successful, master-planned Domain development to the north HI HLAND MALL and Downtown to the south, this development site is ideally positioned along the N. Lamar and Airport Blvd growth corridors.
• Exceptional ingress/egress options to major thoroughfares, Interstate Highway 35, Mopac Expressway (Loop 1), US 183, Lamar Boulevard and Airport TE AS DEPARTMENT Blvd provides rapid connectivity to the area’s top employers Downtown as well as the entire Austin MSA. OF P LIC SAFETY A AMPUS • The Property is located within a mile of the Highland Mall redevelopment project and 5 miles of the Domain and Arboretum mixed-use developments, spanning over 5.5 million square feet of office and retail space and featuring Austin’s top tech employers, restaurants, bars and entertainment venues.
• The Property is a quarter mile, or 5-minute walk from Capital MetroRail commuter rail Crestview Station, providing efficient access for tenants to Austin’s premium public transportation entity. KOENIG LN
AUSTIN’S BOOMING GROWTH
• Based on Oxford Economics’ percentage growth projections, Austin is expected to lead the nation in both population and employment growth over the RENT OOD next 5 and 10-year horizons at a growth rate over twice that of the national average. NEI H ORHOOD • With a resilient and diverse economy, Austin has added back over 700% of the jobs it lost during the recession, reflecting the highest percentage of any market in the country. Stated another way, Austin has added back 7.09 jobs for every job that was lost during the recession. SITE • U.S News and World report ranked Austin as the best place to live in America for 2018 for the second year in a row. Austin’s business friendly environment
and low cost of living attracts the nation’s top talent and millennial demographic which will continue boost rental demand for the foreseeable future. L D AIRPORT N LAMAR L D THE DOMAIN O MAP MINUTE AL TO CRESTVIE STATION INVESTMENT HIGHLIGHTS 4 NORTH LAMAR TOD DEVELOPMENT SITE DEMOGRAPHIC STATS WITHIN 5 MILES
Average HH income Median Housing Value Population White Collar DO NTO N $96,944 $364,223 338,829 66%
M ELLER AIRPORT REDE ELOPMENT H DE PAR UT AMPUS NEI H ORHOOD
TRIAN LE
HI HLAND MALL
TE AS DEPARTMENT OF P LIC SAFETY A AMPUS
KOENIG LN
RENT OOD NEI H ORHOOD
SITE
AIRPORT L D AIRPORT N LAMAR L D THE DOMAIN O MAP MINUTE AL TO CRESTVIE STATION INVESTMENT HIGHLIGHTS 5 NORTH LAMAR TOD DEVELOPMENT SITE LOCATION OVERVIEW
THE DOMAIN (5 MILES FROM THE SITE) DRIVE TIMES
• 1.8M SF Retail | 1.9M SF Office | 2,800 Units Multi-Housing | 775 rooms in 4 Hotels • Dubbed Austin’s “Second Downtown” • Premium live-work-play community - 6,000 residents and 17,500 employees projected this decade 4 MINS • Austin’s retail hub and newly minted hot spot for restaurants and nightlife HIGHLAND MALL
Whole Foods Apple Flower Child 6 MINS Neiman Marcus Louis Vuitton Shake Shack TARGET Nordstrom SoulCycle North Italia Restoration Hardware RockRose TopGolf 7 MINS CRESTVIEW STATION
DOWNTOWN AUSTIN (5 MILES FROM THE SITE) 9 MINS MUELLER DEVELOPMENT • 110,000 Employees & 12,000+ Residents • 14.6 Million SF of Office Space 10 MINS • Nation’s top employers: Facebook, Google, Whole Foods, Cirrus Logic, Indeed & Homeaway H-E-B GROCERY (TWO LOCATIONS) • 200 Restaurants, 150 Bars, 140 Retail Stores 12 MINS DOWNTOWN AUSTIN Whole Foods Lululemon Flower Child Trader Joes Under Armour Bobs Steak House 12 MINS Bonobos Bank of America North Italia THE DOMAIN Little Woodrows Tru Foods Alamo Draft House 20 MINS AUSTIN BERGSTROM INTERNATIONAL AIRPORT
LOCATION OVERVIEW 6 NORTH LAMAR TOD DEVELOPMENT SITE NORTHWEST HILLS ACC + HIGHLAND MALL REDEVELOPMENT (.5 MILES FROM THE SITE) WINDSOR HILLS ANDERSON LANE/ • 81-acre adaptive reuse and redevelopment of Highland Mall, now BURNET CORRIDOR SITE known as Highland ALLANDALE • 3.3M SF of mixed uses connected by a network of pedestrian- AIRPORT BLVD/ friendly streets and open spaces HIGHLAND MALL • 1.3M SF Austin Community College • 1,200 residences WESTLAKE HILLS
A MUELLER DEVELOPMENT (2.5 MILES FROM THE SITE) (USE 3.1 A MUELLER GROWTH CHART) MUELLER TARRYTOWN • 700-acre mixed-use redevelopment of Austin’s former airport • The master-planned community is a pedestrian friendly and transit EAST AUSTIN oriented model of new urbanism and sustainability WESTLAKE • 6,500 residents and 4,900 employees CENTRAL BUSINESS DISTRICT DOWNTOWN • The Dell Children’s Medical Center, The Thinkery (Austin Children’s Museum) and the AISD Performing Arts Center OAK HILL
SOUTH AUSTIN HEB Grocery Alamo Draft House Torchy’s Tacos Best Buy Home Depot Mod Pizza EAST RIVERSIDE PetSmart Marshalls Kyoten Sushiki Bed Bath & Beyond Old Navy Starbucks
Austin International Airport LOCATION OVERVIEW 7 NORTH LAMAR TOD DEVELOPMENT SITE AIRPORT BLVD REVITALIZATION (1 MILE FROM THE SITE)
• Originally a City of Austin program to reinvent the aging corridor • Recently transformed into a unique and vibrant multimodal area • Eclectic shops, foodie destinations, and undeniable Austin character and charm
Foreign & Domestic In-N-Out Burger Drink Well Kome Sushi Workhorse Bar House Pizzeria Bullfight Sala & Betty Bun Belly East Side Pies Sweet Ritual Phara’s
THE TRIANGLE (1.25 MILES FROM THE SITE)
• 1.3 million square foot mixed-use development that has three phases of multi- housing encompassing 529 units located above Austin’s most popular retail destinations. • This unique location, which forms a triangle at the intersection of Lamar Blvd and Guadalupe, sees an estimated 79,000 vehicles travel by the site each day.
Chase Bank Maudies Tex Mex Hopdoddy Corepower Yoga Mandola’s Italian Galaxy Cafe Orange Theory Mama Fu’s Office Max Myo Massage Vitamin Shop Snap Kitchen
LOCATION OVERVIEW 8 NORTH LAMAR TOD DEVELOPMENT SITE ANDERSON LANE/BURNET ROAD GENTRIFICATION (2 MILES FROM THE SITE)
• Renaissance of a dated area into one of Austin’s most vibrant destinations • Retail experience redevelopment: 150+ eateries and entertainment venues and counting • Young, fresh vibe similar to its South Lamar and South Congress counterparts
Hopdoddy Lucy’s Fried Chicken Hello Cupcake Baby Greens Epicerie Cafe Torchy’s Tacos Alamo Draft House Little Woodrows Peached Tortilla Cover 3 Picnik Barley Swine
UNIVERSITY OF TEXAS AT AUSTIN (4 MILES FROM THE SITE)
• The University of Texas is the 5th largest university in the country with over 50,000 enrolled students. • The University employs over 23,500 faculty and staff and contributed over $10 billion in income to the Texas economy last year. • With over 10,000 graduating students a year the University provides a deep pool of talented young professionals who prefer proximity to urban employment centers.
LOCATION OVERVIEW 9 NORTH LAMAR TOD DEVELOPMENT SITE APARTMENT MARKET OVERVIEW
AUSTIN Austin continues to flourish as the city’s economic, population, and job growth consistently rank as some of the highest in the nation. Offering an unmatched lifestyle, Austin was recently named the #1 city in the country for the second year in a row by U.S. News and World report. The apartment market continues to benefit greatly from these strong dynamics resulting in heightened occupancy and blistering rental rate growth. Coupled with 31% of the population being in the prime renter age bracket of 18-34, the apartment market is driven by low unemployment, substantial population growth, and corporate relocations in North Austin, specifically. The strong multifamily supply/ demand balance combined with one of the nation’s largest millennial populations (~30%) sets Austin up well for continually high absorption and occupancy figures.
• Occupancy has risen to 93.3% for stabilized properties in the 1Q 2019 as there were 2,024 units absorbed on 1,605 units added across the metro area
• Driven by the beginning of an increasingly active leasing season, rents increased over the first quarter to land at $1,269 per month and $1.47 per square foot for the Austin metro
NORTH CENTRAL SUBMARKET
The Property is in the North Central submarket. Due to its infill location, access to the major transportation arteries and employment hubs, the North Central submarket is one of the highest performing submarkets in the metro area, having realized repeated quarters of positive absorption, rent and occupancy growth.
• Rents in the North Central submarket $1,400 ($1.75 PSF) are up 2.4% over the fourth quarter and higher on average than the rest of the metro area $1,267 ($1.47 PSF)
• Occupancy across the submarket is 94% and continues to rise as 1,103 units were absorbed while only 806 units were delivered over the last 12 months.
APARTMENT MARKET OVERVIEW 10 NORTH LAMAR TOD DEVELOPMENT SITE The North Central Submarket, one of Austin’s premier infill submarkets encompassing 31 Properties and 8,683 units of which over half are Class A. The submarket’s proximity to Downtown (12 minutes), The Domain (10 minutes) and The University of Texas (10 minutes) has helped the $1.71 submarket perform admirably over the last few years, particularly the last twelve months. RENT PSF Average rents have grown 5.32% to $1,400 ($1.75) over the past year with occupancy reaching close to the highest levels seen in recent years (94%). Absorption has been consistently impressive in the submarket absorbing 3,479 units of 3,530-unit deliveries (98.5%) since 2014, almost half the inventory. There are currently 1,230 units under construction, but none within 2 miles of the site.
90.41% NORTH CENTRAL SUBMARKET ABSORPTION AND OCCUPANCY CHART AVERAGE 1,200 94% OCCUPANCY 1,000 93%
800 92% 912 600 91% UNIT DELIVERIES 400 90% LAST 12 MONTHS 200 89%
0 88% 2015 2016 2017 2018 2019 YTD
New Units Added Units Absorbed Occupancy
North Central Submarket Overview PROPERTY CLASSIFICATION A B C TOTALS/ AVERAGES Made with Properties 12 3 14 29 Units 5,168 790 2,725 8,683 Average Rents $1,560 $1,405 $976 $1,363 Average Rents PSF $1.93 $1.66 $1.43 $1.75 Annual Rent growth (%) 4.38% 5.43% 7.47% 5.45% Occupancy (5/10/2019)* 92.40% 93.54% 95.89% 93.60%
APARTMENT MARKET OVERVIEW 11 NORTH LAMAR TOD DEVELOPMENT SITE BEST PLACE TO LIVE IN THE U.S. AUSTIN, TEXAS 2017, 2018 & 2019 Source: U.S. News and World Report THRIVING ECONOMY
Although it maintains a laid-back vibe, the city dedicated to “Keeping Austin Weird” shows no signs of slowing down. A booming economy, growing job market, high quality of life and low cost of living make Austin a sought-after city for all ages. As one of the nation’s top economic performers, Austin is a thriving city with a young, highly educated and vibrant population that attracts business and tourism. The metro leads the nation in terms of population growth, fueled largely by the LARRY ELLISON, CTO OF ORACLE strongest rate of in-migration with an impressive 152 people moving to the city a day. The 11th largest population among “Austin is one of the key places we want to be U.S. cities, Austin’s population has increased 34.1% over the because we think that’s where our people want to past decade. The population explosion of the Texas capital, be. We want to develop the kinds of facilities where which reached approximately 2.1 million last year, is expected to soar 98.5% to nearly 4 million by 2040. Nearly doubling in you feel good about coming to work every day.” size, Austin’s population is projected to grow faster than any other large U.S. city in the next 25 years. Named among Forbes 10 Best Cities for Jobs, Austin has one of the best job markets in the nation with a trend of nearly 20-year lows in the metro’s monthly unemployment rate. In the 12 months ending in December 2018, the Austin metro added 36,800 net new jobs, a growth rate of 3.5%. The seasonally adjusted unemployment rate is currently 2.7% (3.7% nationally).
No. 1 No. 1 No. 1 No. 1 NATION’S TOP HIGH-TECH HUB RISING CITY FOR STARTUPS BEST BIG CITY TO LIVE IN AMERICA AMERICA'S GREATEST MUSIC CITY Source: Wall Street Journal Source: Inc. Source: Money Source: Huffington Post
ECONOMIC OVERVIEW 12 NORTH LAMAR TOD DEVELOPMENT SITE Consistently named among the best places to live and work, Austin is universally regarded for its thriving economy, low cost of living and enviable quality of life. Austinites enjoy a reasonable cost of living with a median home price that is below the national average, lack of state income taxes and the highest per capita income of all major cities in the Lone Star State. In addition to a burgeoning downtown and prosperous employment opportunities, the city offers many museums, performing arts venues, sporting events and recreational activities. Affectionately deemed “The Live Music Capital of the World”, Austin boasts over 1,700 live music venues and is home to South by Southwest (SXSW) and the ACL Music Festival, two of America’s largest media events. Austin is an enchanting city celebrated for its robust natural beauty and abundance of outdoor amenities, including Lady Bird Lake, Austin Hike and Bike Trail, Barton Creek, Lake Austin and numerous greenbelts. Central Texas boasts a cosmopolitan atmosphere without the big city stress and it is not hard to see why many people love to call Austin home.
$1,000
$900
$800 $700 AUSTIN 8 BILLION $600 FESTIVAL VISITOR SPENDING $500 REVENUE BILLION $400 27.4 MILLION $300 ANNUAL VISITORS (REVENUE IN MILLIONS) $200 MILLION Source: Downtown Austin Alliance $100 MILLION $0 COTA SXSW ACL irc it o t e So t y A stin ity i its A ericas So t est M sic esti al
No. 2 No. 2 No. 2 Top 10 BEST JOB MARKET LARGEST MILLENNIAL POPULATION MOST EXCITING FOOD CITY IN AMERICA FOR ECONOMIC PERFORMANCE Source: Forbes Source: Brookings Institution Source: Zagat Source: Milken Institute
ECONOMIC OVERVIEW 13 NORTH LAMAR TOD DEVELOPMENT SITE HIGH-TECH HUB
Austin’s economy continues to benefit from the technology sector boom that began in the 1990s, dubbing the metropolitan area “Silicon Hills”. One of the nation’s preeminent locations for technology, Austin is now growing four times faster than most of Silicon Valley--drawing talent and startups from all over the country.
APPLE ANNOUNCES NEW $1 BILLION AUSTIN CAMPUS AS PART OF BIG US EXPANSION
The new 133-acre development is expected to make it the largest private employer in Austin. Apple expects the new campus to accommodate 5,000 employees at first, though it will ultimately have a total capacity of 15,000. Source: www.theverge.com/2018/12/13/18139009/apple-billion-dollar-austin-campus-us-expansion
TIM COOK, CEO OF APPLE “Literally, many, many pieces of our company are here. The team here is a very critical part of our company, and we’ve been very happy here.“
1 ,000 , 00 ,000 ,000 ,000 ,800 2,700 A STIN EMPLO EES A STIN EMPLO EES A STIN EMPLO EES A STIN EMPLO EES A STIN EMPLO EES A STIN EMPLO EES A STIN EMPLO EES (7,400 Potential) (1,100 Potential) (10,000 Potential) ECONOMIC OVERVIEW 14 NORTH LAMAR TOD DEVELOPMENT SITE CORPORATE EXPANSIONS & RELOCATIONS ROUND ROCK CEDAR PARK
135 IN 2018 (18,213 NEW JOBS)
1
115 IN 2017 (13,051 NEW JOBS)
101 IN 2016 (10,044 NEW JOBS)
AUSTIN • In the past decade Austin is the No. 1 city gaining company migrations from California. • Austin has the highest tech salaries in the nation with an average salary of $202,000. (Adjusted for cost of living) • 138,000 tech-related jobs. (14% of total jobs compared to CENTRAL BUSINESS DISTRICT 7% nationally) • Austin’s strong tech presence fuels $31 billion into the economy, accounting for about 35% of the total.
2.1 N 1 2 18. % 4 % MSA POPULATION NEW RESIDENTS DAILY HOUSING GROWTH SINCE 2010 POPULATION WITH BACHELOR’S DEGREE OR HIGHER 11TH MOST POPULOUS CITY IN THE U.S. 32% NATIONALLY ECONOMIC OVERVIEW 15 NORTH LAMAR TOD DEVELOPMENT SITE DEAL CONTACTS
GARRETT GILLELAND Director 512.532.1968 [email protected]
SEAN SORRELL Senior Managing Director T: 512-532-1924 [email protected]
SPENCER ROY Associate 512.532.1977 [email protected]
SCHAFER SMARTT Analyst 512.532.1971 [email protected]
AUSTIN, TEXAS