BOOM TIMES IN AUSTIN
No need to adjust your sets; we are telling you about your neighboring city in this issue, not your own. We know many of you do business there—or maybe should think about it.
Fasten your seat belts: Tech is driving Austin again, and the brokers in the pit can't change the tires fast enough. We'll be on the scene for our first event there this Tuesday, July 19—c?mon down and join us! (You can sign up here.)
|We snapped this of HPI partner Sam Houston (yes, a distant relation), who says leasing the last nine months is better than any he's seen since the dotcom days, and he's not just talking downtown but the 'burbs that he knows best. SW rental rates bottomed out in Q1 '10, he says, and are now more than a year into recovery; NW rates struggled until Q4 and have also been climbing back. He recites the space hikes: Apple?s added 125k SF to its 350k, mainly in NW for engineering and tech support; Google took 40k in Stonebridge; eBay will double from 60k at Parmer Lane; Polycom has moved out of 90k in the north to 130k. And that's not all:Schwab is enlarging its footprint by 100k SF at Research Park;Emerson Process Management is going from 175k to 275k in two buildings at Frontera Vista; VM Ware has gone from 25 to 75k; and Intel is expanding from a scattered 250k into a 400k SF building it bought for itself on S. Mopac. At Ladera Bend, HPI has signed Samsung and Spice Works for 30k each and All Web Leads for 23.|
You can find HPI in its own building here at San Clemente. Originally Hill Partners, the firm was started by Richard Hill, Dick Anderson, and Kent Lance in 1992 and Sam arrived three years later. At the time its focus was industrial, and it owned or managed 1M SF. Sam helped expand it into office, an area he now directs along with development, investment, and third-party management. By 2000 HPI had 7M SF in all asset classes, and today it's got 13M SF in Austin and San Antonio, and has developed a $1B worth of property. An Abilene native and Baylor tight end (who played alongside Hall of Famer-to-be Mike Singletary), Sam started as a broker in Dallas in the early '80s, then moved to Raleigh, only to find the best Tex-Mex there was Taco Bell. He eventually brought his young family back to Austin. Sam sees the key to Austin growth as the fact jobs increased a net of 18,000 last year with another 25,000 to 30,000 expected this year. The reasons? Migration from other states due to lower prices, a business-friendly environment, and the quality of life from Hill Country BBQ to the world class music scene. The universities alone, he says, provide Austin an amazing workforce. (He should know—his three daughters cover all the bases by attending A&M, Texas State, and UT.)
Contractors, too, are seeing a dramatic turnaround. Over breakfast at the Driskill, Hill & Wilkinson biz dev chief Deren Wilcox told us that 12 months ago there were few bids outside higher ed and multifamily, but today his estimating department is busy. Competition remains tight, but opportunities have spiked for hotels,healthcare, seniors living, and tenant improvement, and are even creeping back in retail, industrial, and office. The 43-year-old Dallas firm, which opened its Austin office three years ago, feels well positioned: In recent years H&W has done $100M in business for UT including the first platinum higher ed building in Texas and a just finished health science facility in Tyler; assisted living and memory care projects in Dallas and Houston and a $50M replacement hospital in Decatur; and hangars, flight simulator facilities, and elements of HQ for Southwest Airlines at Love Field. It also has a small projects group that's worked at the Plano campuses of JC Penney and Frito Lay, plus out of the Austin office did a data center in San Antonio, a Whole Foods in Oklahoma, a car dealership in Houston, and renovations for Dell in El Paso. Deren is preparing himself for our event next week by hanging this week with family (including kids ages 2 and 5) at the beach in Alabama.
It ain't just Dell that defines Austin now. Facebook, no less, has taken 60k SF in this office building on 6th Street for its largest office outside Silicon Valley. We were able to tour the ultra-cool facility but had to agree not to take pictures—so that's why you just see the outside.
Even Jones Lang itself moved downtown from Mira Vista in the ?burbs, allowing young guns like Zach Jamail and Ryan Bohls to ply their tenant rep work for tech firms via hipper meals at Wahoo?s Fish Tacos and happy hours at Belmont. (As anyone who knows them can tell, we made them pose: Usually they don't get up from their desks until it's dark.)
Even Sandra Bullock calls Austin home, and really means it. We snapped this of one of her two restaurants in town, Walton's Fancy and Staple, which is also a takeout deli, coffee shop, bakery, caterer, and florist.
Hotels are sprouting up, like the 37-floor W. Unfortunately, 100-degree temps loosened grout, causing glass to fall off of balcony railings and the hotel to shut down for a week while all windows were replaced. But the place is reopened and again packed. Speaking of a full house: Don't miss our inaugural Bisnow Austin State of the Market event starting at 7am Tuesday at the Hyatt Regency Austin. You can still sign up here.