The idea of Austin as a significant global hub for technology is well-established, but Austin as a tempest of real estate investment? Apparently so.
According to JLL's "Globalisation and Competition: The New World of Cities" report, Austin is one of the top metros in the world for the velocity of commercial real estate deals relative to size.
Austin ranks No. 12 in the world in JLL's Investment Intensity Index. It's No. 4 in the U.S., being edged out only by Honolulu; San Jose, California; and San Francisco. The index measures real estate investment as a proportion of the city's gross domestic product.
Coddington said the past year has been unprecedented in terms of the type of investors interested in Austin. Companies with longstanding ties to Central Texas remain involved but "the influx of foreign capital has been significant … both debt and equity," Coddington said.
He was part of a Wednesday panel at the monthly breakfast sponsored by the Urban Land Institute's Austin District Council.
Other presenters were developers Adam Nims of Trammell Crow Co. andJennifer Wiebrand of Gables Residential, along with moderator Rob Golding ofLive Oak-Gottesman. All feel confident about next year's real estate prospects, but perhaps with a degree of restraint.
Though Trammell Crow is pulling out all the stops with the redevelopment of the Green Water Treatment Plant downtown, the development giant is exploring more industrial opportunities. As Nims pointed out, office reception areas are littered with packages — online purchasing this holiday season has been over the top. Although Austin is not a traditional distribution hub, companies need local warehouses for shipping and delivery capacity, which is certain to grow with Austin's population explosion.
Gables Residential, which has been one of the dominant developers of downtown housing for years, is now looking at more diverse sites. While Wiebrand is ecstatic that rent has continued its strong growth for Gables Residential in 2015 — it's up 7 percent from 2014 and way over her projections at this time last year — she's not convinced that trajectory is sustainable. Gables Residential most likely will diversify its deliveries moving forward, she said, perhaps with projects that don't require the amount of time and investment demanded in downtown Austin.
Though Americans routinely view their country as the center of the universe,JLL's report doesn't reflect as much. Sure, some U.S. metros fared well in various indices, but some emerging cities may surprise.
Here's a few highlights:
- The top 10 cities for global real estate investment are London, New York, Tokyo, Paris, Los Angeles, Chicago, Washington, Boston, Singapore and San Francisco.
- The top 10 cities for human capital — strong workforces and higher education — are London, Boston, New York, Toronto, San Francisco, Paris, Hong Kong, Sydney, Singapore and Stockholm.