Summary
- Freddie Mac predicts slower apartment rent growth for rest of 2024?
- A Fed rate cut is finally within view (for September)
- Apartment demand has returned to pandemic-era highs
- UT-Austin faces affordability challenges in Austin
- ATX Tower set to deliver in 4Q24
- Tesla now has over 1 million square feet along of support space to supplement its 10 million square foot gigafactory
- San Antonio Missions' owners win mayor's support for new ballpark
- $18M New Braunfels Topgolf gets green light?
National and State News
Freddie Mac Predicts Slower Apartment Rent Growth for Rest of 2024 (CoStar)
- Why it matters:?Rent growth, increased supply, and stabilizing occupancy will have a significant impact on rental market dynamics and investment opportunities.
- Due to an abundance of available properties and higher interest rates, Freddie Mac predicts a deceleration in rent growth during the second half of 2024.
- Landlords, particularly in areas with prior rent increases and ample supply, are focusing on maintaining occupancy, resulting in stabilized rent prices.
- The multifamily market continues to show promise for long-term growth, especially in affordable secondary markets situated in the Southern Plains and Sunbelt regions.
A Fed Rate Cut Is Finally Within View (WSJ)
- Why it matters: Although we’ve been fooled before, a September rate cut seems the most likely timeline for a rate cut yet.
- In each of the four meetings held this year, the possibility of cutting interest rates has been postponed. However, this time around, the Federal Reserve officials are likely to indicate a high likelihood of a rate cut at their upcoming September meeting, owing to developments in inflation and the labor market.
- The Federal Reserve's newfound willingness to decrease interest rates can be attributed to three key factors: positive news regarding inflation, indications of a cooling labor market, and a shift in their assessment of the risks associated with allowing high inflation or causing economic weakness.
- Some officials have offered a glimpse into the arguments they are likely to present to convince their colleagues that it is time for a rate cut. Chicago Fed President Austan Goolsbee expressed his view in an interview, stating that the interest rate was set when inflation was over 4%, but with inflation now at around 2.5%, it suggests that monetary policy has become more restrictive. Goolsbee added that the current economic conditions do not indicate an overheating economy, implying that the restrictive stance should be lifted sooner rather than later.
Top 10 Markets for Apartment Demand in 2nd Quarter (Real Page)
- Why it matters:?Apartment demand has returned to pandemic-era highs.
- In the second quarter, the demand for apartments in the United States experienced a significant surge, primarily driven by a few high-performing markets. RealPage Market Analytics data reveals that the country absorbed more than 161,700 units between April and June, marking the strongest quarterly performance since the surge in demand during the pandemic era in 2021.
- Dallas, specifically, recorded the absorption of over 9,700 units during the April to June period, surpassing the annual demand volumes of 38 out of the top 50 markets.
- Apart from Dallas, Austin and Houston also experienced exceptional demand in the second quarter, leading the nation. Phoenix and New York completed the list of the top five markets with the highest demand.
Austin News
UT struggling with Austin's affordability crisis — just like everyone else, Jay Hartzell says (ABJ)
- Why it matters:?University's vast real estate holdings could be part of solution for students.
- The University of Texas is facing significant challenges due to the affordability issues in Austin, which are impacting its recruitment efforts and leading to increased employee turnover.
- According to a report from the State Auditor's Office, the institution experienced a total employee turnover rate of 14.1% in fiscal year 2022, higher than the previous year's rate of 11.6%.
- To address the housing issues stemming from the escalating living costs in Austin, the university is exploring the possibility of utilizing its real estate assets. For instance, the Breckenridge Tract, a 300-plus acre property owned by UT in West Austin, east of Lions Municipal Golf Course, is being considered. While there are no immediate plans for the tract, apart from H-E-B LP leasing land from the site, housing could potentially be an option, as stated by Hartzell, the university's representative.
Tower on West Sixth Street nears completion (ABJ)
- Why it matters: ATX Tower will add hundreds of apartments and a big chunk of new office space to downtown.
- ATX Tower, previously known as 321 West, is set to open in the fourth quarter of 2024 and will share similarities with Sixth and Guadalupe, which was inaugurated earlier this year.
- The office space at ATX Tower spans from the 14th to the 19th floors, encompassing over 100,000 square feet. Additionally, the tower offers a mix of luxury apartments on floors 22 through 54, including studio, one-bedroom, and two-bedroom units.
- The development of ATX Tower is a joint venture involving Ryan Companies, who have already successfully developed notable projects such as Oracle's 560,000-square-foot campus, the Permitting and Development Center for the city of Austin situated within the redeveloped Highland Mall spanning 251,000 square feet, and the 32-floor tower that houses the Thompson Hotel and Sienna at the Thompson apartments.
Tesla leases space in RCR Taylor Logistics Park (ABJ)
- Why it matters:?Tesla now has more than one million square feet of?support space?to supplement its 10 million square foot gigafactory.?
- Tesla Inc. has made plans to occupy a rail-served building spanning 183,000 square feet in the RCR Taylor Logistics Park, a project being developed by Houston-based Partners Real Estate.
- With its presence in Kyle, Hutto, and now Taylor, the Elon Musk-led company has a combined total of over 1 million square feet of space, providing additional support to its expansive gigafactory located in eastern Travis County. The gigafactory itself boasts a floor space of 10 million square feet.
- The Austin Business Journal has identified numerous instances of the "Tesla effect" since the announcement of the gigafactory in 2020. This effect has resulted in the creation of thousands of high-tech manufacturing and research-and-development jobs, substantial capital investments in the hundreds of millions of dollars, and the allocation of hundreds of thousands of square feet of industrial space devoted to Musk's iconic brand.
San Antonio News
After struggling to get City Hall's attention, Missions owners win mayor's support for new ballpark (SA Express News)
- Why it matters: With the support of public financing, the odds of a baseball stadium further revitalizing west downtown have increased tremendously.?
- The San Antonio Missions' owners have faced challenges in garnering the attention of City Hall regarding their desire to construct a downtown ballpark. However, they have now secured the support of Mayor Ron Nirenberg, along with the potential for public financing.
- Nirenberg and Bexar County Judge Peter Sakai intend to jointly sign a nonbinding letter of intent, signifying the county and city's commitment to contribute funding towards the stadium.
- According to sources cited by the Express-News, the estimated cost of a new ballpark is approximately $200 million, and it is expected to be accompanied by the development of new apartments and office spaces in the surrounding area.
Done deal: $18M New Braunfels Topgolf gets green light (SABJ)
- Why it matters: A New Braunfels Top Golf indicates a major commitment by the brand to the rapidly-growing I-35 corridor. ?
- Both the City of New Braunfels and Comal County have granted significant incentives to enable the construction of a new Topgolf facility located approximately 30 miles north of San Antonio. This upcoming development in New Braunfels will be the 13th Topgolf venue in Texas and the third in the San Antonio-Austin region.
- The multistory establishment, expected to feature up to 60 golf hitting bays, will be situated within the Town Center at Creekside, a mixed-use development in New Braunfels that already houses various entertainment tenants.
