Work Starts on Apartment Project, As Boom Looms for South Lamar
Austin-based Ardent Residential has broken ground on Gibson Flats, a 202-unit upscale apartment complex that will be part of an emerging apartment boom along South Lamar Boulevard.
Slated for vacant land at South Lamar and Gibson Street, the first apartments in the five-story building are expected to be ready for tenants by mid-2013, with the project scheduled for completion in late 2013.
The location "is at the center of a burgeoning entertainment district that appeals to the young professionals who gravitate toward urban living," said Brett Denton, a principal in Ardent with Art Carpenter. Denton cited popular establishments such as the Alamo Drafthouse, the Highball bowling alley and lounge, Maudie's and Uchi restaurants, and other nearby entertainment options.
Denton said Ardent worked with city arborists to protect trees on the site, including seven heritage trees. Developers are zeroing in on the area, which they say faces a shortage of apartments but heightened demand for rental units.
The area mirrors the rental squeeze facing the Central Texas region, where job growth and newcomers, coupled with a relative lack of new apartment construction, are sending rents and occupancies soaring. Austin-area apartments were about 96 percent full by the end of 2011.
The region's pipeline is swelling with more than 17,000 units either under construction or expected to start in the next year, according to Austin Investor Interests, which tracks the local apartment market.
MPF Research, which also follows the market, said the Austin-area apartment market will be the nation's No. 2 performer this year based on projected increases in rents and occupancies, behind San Francisco. AMLI Residential predicts Austin will be its top-performing market this year, based on AMLI's rent growth projections.
Central Texas' population was 1.76 million in 2011, up about 52,000 from 2010, said Charles Heimsath, a local real estate consultant, citing figures from the Texas Department of Health Services.
"This means we needed approximately 20,000 new occupied housing units of all types to accommodate this increase in population, most of which was either accommodated by the limited construction of new apartments and single-family homes or increases in occupancy among existing rental properties and the purchase of available single-family homes," Heimsath said. "The result was a sharp jump in apartment occupancy, and a decrease in available homes for sale."
The region added 864 apartment units in 2011, Heimsath said, and Metrostudy, which tracks the local housing market, said the year ended with builders having started construction on 6,116 single-family homes.
On South Lamar, other proposed apartment projects include Houston-based Hanover Co., which plans about 340 units just south of Uchi; and Greystar Residential, which intends to build about 400 apartments in the Lamar Square shopping center that houses the Alamo Drafthouse. Farther south, Ardent and Atlanta-based Post Properties Inc. are building a complex with 298 apartments, the first of which will be ready for residents late this year.
Nearby, on Barton Springs Road, another 448 units are planned in two projects slated to be built on each side of Chuy's restaurant. The bulging apartment pipeline has drawn concerns from some nearby residents about the potential for increased traffic.
Hanover plans to start construction on its project in September, with the first units ready in spring 2014. Hanover has said rents will average $1,700 to $1,800 a month.
Market rents for Gibson Flats have not been set, Denton said. He said the project will include 10 units to be leased at below-market rates.
BlackRock Realty Advisors in New York is providing the equity financing for Gibson Flats, and the construction lender is Comerica Bank, Denton said.
Ardent Residential, along with Post Properties, also developed the Four Seasons Residences, the 32-story luxury residential high rise next to the Four Seasons Hotel downtown.
By Shonda Novak AMERICAN-STATESMAN STAFF
Updated: 7:44 p.m. Friday, Feb. 10, 2012
Published: 7:21 p.m. Friday, Feb. 10, 2012