Summary
- Powell says “time has come” for rate cuts at Jackson Hole summit
- U.S. home sales rose 1.3% in July
- Cortland raises $1.5 billion for multifamily investments across the Sunbelt
- Taylor, TX cannot meet multifamily demand caused by new Samsung site
- WayMaker Ventures looking to develop 181 acres of housing in Hutto
- Teachers in the Austin metro can only afford 59% of apartments
- As soon as next year, San Antonio will be home to the 3rd largest university in the state
- Port SA billion-dollar campus plan draws federal interest
- With official Board of Regents approval in hand, the path is clear for UTSA to make a major investment in downtown
National News
Fed’s Powell Declares “Time Has Come” for Rate Cuts (WSJ)
- Why it matters: Powell says at Jackson Hole summit that central bank intends to act to stave off labor market weakening.
- The stock market experienced an uptick in indexes, with the Dow Jones Industrial Average gaining over 300 points, equivalent to approximately 0.8%. The Nasdaq Composite surged by 1.1%. Meanwhile, Treasury yields declined.
- The Federal Reserve's main interest rate is currently established within a range of 5.25% to 5.5%, which is widely considered to have a negative impact on economic activity. There is a divide among market participants regarding whether the Fed will reduce the rate by 0.25 percentage points or 0.5 percentage points during the September meeting.
- Between April 2023 and July, the unemployment rate has risen from 3.4% to 4.3%. In terms of inflation, as measured by the Fed's preferred indicator, it reached 2.5% in June, the most recent reported figure.
U.S. Home Sales Edged Up in July, Prices Still Near Record Highs (WSJ)
- Why it matters: Recent decline in mortgage rates helps boost activity, but it remains stuck at low levels.
- According to the National Association of Realtors, sales of pre-owned homes in July increased by 1.3% compared to the previous month, reaching a seasonally adjusted annual rate of 3.95 million. This marks the lowest level for July since 2010.
- On a yearly basis, existing-home sales, which account for the majority of the housing market, experienced a decline of 2.5%.
- The national median price for existing homes in July stood at $422,600, reflecting a 4.2% rise from the same period a year ago.
- At the end of July, there were 1.33 million homes available for sale or under contract nationally, indicating an increase of 0.8% compared to previous figures.
Cortland Raises $1.5B for Sunbelt Multifamily Investments (CRE Daily)
- Why it matters: Atlanta-based Cortland's successful fundraising indicates strong investor confidence in the multifamily sector, particularly in the Sunbelt region, despite recent market challenges.
- The Cortland Enhanced Value Fund has surpassed its initial goal of $1 billion and has successfully raised $1.5 billion in total. Around 80% of the funds came from institutional investors, with a quarter of the commitments originating from foreign sources.
- Cortland's investment focus is on the Sunbelt region, where there are improving multifamily absorption rates. With 30% of the fund already allocated, it demonstrates the firm's capabilities in identifying lucrative investment opportunities despite the challenges of the market.
- Although the Sunbelt region may encounter some challenges, anticipated interest rate cuts have the potential to stimulate the commercial real estate market, offering advantages to multifamily investors like Cortland.
Austin News
Taylor, Texas, Faces Tight Apartment Market Ahead of Samsung’s Opening (CoStar)
- Why it matters: The city’s 96% occupancy rate could push renter demand further west.
- The increasing housing demand in and around Taylor, Texas, due to Samsung's upcoming semiconductor chip production, suggests that the area may experience difficulty meeting this demand in the near future.
- Estimates indicate that the number of employees at Samsung's fabrication plant could potentially reach 2,000. As a result, the population growth in Taylor has already accelerated, with a rise from 0.6% in 2022 to 1.9% in 2023, as reported by the U.S. Census Bureau.
- Samsung is in the final stages of completing the initial phase of its semiconductor manufacturing plant, which commenced construction in 2022. It is projected that over 2.8 million square feet of manufacturing space will be finished this year, with operations scheduled to begin in early 2025.
Housing, industrial space could crop up near the Hutto Megasite (ABJ)
- Why it matters: An Austin developer (WayMaker Ventures) is eyeing a 372-acre project just south of the Hutto Megasite that would create housing and industrial space next to where some of the region's largest economic development projects are being built.
- On August 15, the Hutto City Council granted approval for WayMaker Ventures LLC to develop a planned unit development situated just south of County Road 132. This location is positioned at the outskirts of Taylor and Hutto, approximately 30 miles northeast of Austin and in close proximity to the upcoming Samsung Electronics Co. Ltd. Factory.
- The project encompasses around 181 acres and appears to be a balanced division that includes various housing options such as single-family detached homes, townhomes, and multifamily residences. Additionally, there are approximately 192 acres designated for neighborhood commercial, general commercial, and light industrial space, with a potential footprint exceeding 2.5 million square feet.
New report puts Austin’s affordability crisis for teachers on display (ABJ)
- Why it matters: Teachers in the Austin metro can afford only 59% of apartments and 1% of homes near schools.
- The median salary for teachers in the metropolitan area stands at $63,027, reflecting a 2.1% growth compared to the previous year.
- Educators often face challenges in achieving homeownership due to limited flexibility in work locations and a history of inadequate salary investments.
- The lack of affordability poses a significant risk to Austin's economy, prompting calls for increased availability of affordable housing near schools and modifications to zoning policies to enhance housing affordability.
San Antonio News
Historic merger set for UTSA and UT Health San Antonio by 2025 (SABJ)
- Why it matters: As soon as next year, San Antonio will be home to the 3rd largest university in the state.
- The Chancellor of the University of Texas System, James Milliken, has been granted authorization by the University of Texas System Board of Regents to collaborate with University of Texas at San Antonio President Taylor Eighmy and UT Health San Antonio acting President Rob Hromas to integrate the two institutions by 2025.
- If the integration is successful, the combined institution would rank as the third-largest research university in Texas, boasting research expenditures of nearly $470 million annually. Additionally, it would host six federally funded research and development centers.
- UT Health San Antonio, recognized as the largest academic health research institution in South Texas, is globally ranked within the top 3% for NIH funding. UTSA, a leading research institution, educates a student body of 35,000 across seven colleges and interdisciplinary schools.
- Officials from the UT System anticipate that the merger will enhance the potential of both institutions, transforming San Antonio and South Texas into a prominent global center of academic and research excellence. This development comes in a region expected to experience significant population growth, with projections indicating over 6 million residents by 2040.
Port SA billion-dollar campus plan draws federal interest (SABJ)
- Why it matters: The Port’s billion dollar plan is attracting serious and immediate federal consideration.
- The proposal put forth by Port San Antonio to develop a new billion-dollar campus for Air Force Cyber has received serious consideration from federal officials. Local leaders can expect to gain further insights within a few months regarding whether the Air Force will pursue this plan.
- In May, Port officials confirmed their proposal to construct a new campus that would replace outdated structures and create a consolidated base for Air Force Cyber, along with its affiliated missions and partner agencies. The estimated cost for such a plan is projected to be around $1.2 billion to $1.4 billion, which is approximately half of what the federal government would spend if it undertook a similar project.
- Jim Perschbach, the President and CEO of Port San Antonio, expressed his optimism regarding the recent communication, stating that it is promising news for their proposal being a priority for the United States Air Force. He emphasized the urgency of the situation, noting that the Air Force aims to revisit the matter within three months, which is a remarkably swift response considering the scale and complexity of their various facility requirements.
UT Board of Regents clear UTSA to buy downtown office tower (SABJ)
- Why it matters: With official Board of Regents approval in hand, the path is clear for UTSA to make a major investment in downtown.
- On Thursday, the University of Texas System Board of Regents granted authorization for the San Antonio branch to acquire One Riverwalk Place, a significant office tower located in the urban core. Earlier this month, the university announced the signing of a letter of intent with the current owners, Affinius Capital and Patrinely, for the 264,900-square-foot property. With the approval secured, UTSA can proceed with making a fair market value offer for the building based on an independent appraisal.
- UTSA has set a target of the summer of 2025 for the relocation of academic departments and support staff to One Riverwalk Place. The university aims to bring together these units that align closely with the School of Data Science, National Security Collaboration Center, forthcoming Innovation, Entrepreneurship and Careers building, and the established colleges at its location on West César E Chávez Boulevard.
- UTSA President Taylor Eighmy expressed that the acquisition of One Riverwalk Place reinforces their commitment to downtown San Antonio's expansion, collaboration, and engagement with the community. It also positions UTSA students to acquire the necessary skills for success.
