Austin, Texas—You can tell a lot about the new apartments at Greystar South Congress just by checking out the bike racks.
First, there are a lot of bikes, which comes as little surprise—Austin is a youthful, active city. Second, the bikes aren't cheap. Pristine new Treks and Schwinns are locked up side-by-side with complicated-looking custom models owned by workers in this city's high-tech industry.
“They're a young crowd,” says Savanna Bogardus, regional vice president for Greystar. The average resident here is approximately 28 years old.
To draw these young professionals, Greystar started with a site on South Congress Avenue, a street lined with busy, locally owned shops, restaurants, and nightlife. Then Greystar designed a brick mixed-use mid-rise building that brings even more life to the street.
So far, it seems to be working: Between June, when leasing started, and mid-October, residents signed 94 leases for the 306 one- and twobedroom units. Advertised monthly rents ranged from $1,023 a month to $1,842 in October and averaged $1.48 per square foot, according to Bogardus.
That's not bad for a tough economy, and it's close to the pro-forma estimate of $1.50 per square foot. The developer doesn't offer much to lure tenants: Concessions range from two weeks to a month of free rent, says Bogardus.
Part of the building's appeal is its site on a high part of South Congress with views of downtown and easy access to major roads like I-35 and Highway 290. The building is a halfmile from St. Edward's University, 15 minutes from the airport, and about three miles south of the center of town, according to Bogardus.
In 2006, Greystar partnered with condominium builder Symcox Development Co. and equity provider Tierra Capital, LLC, to develop the 7.3-acre site, which also includes 69 condominiums facing South Congress, structured parking, and 22,000 square feet of retail space split into nearly a dozen storefronts. Symcox had worked to develop the property for years and initially advertised units for completion as early as 2006. The $65 million development was financed with a permanent loan from Wachovia, mezzanine financing from Babson Capital Management, and developer equity.
Greystar plans to complete the entire property this year. By October, more than half of the condominiums had pre-sold, despite the difficult selling environment.
Also in October, negotiations were well under way to lease about 80 percent of the retail space to local vendors, including a coffee shop, a sandwich place, and a fruit smoothie seller. The developers could have rented the space to a larger chain store; however, they wanted to fit into the neighborhood, which is dominated by local businesses.
“South Congress is kind of anti-big box,” says Bogardus.
Greystar also picked amenities to appeal to the young singles and couples that dominate the local rental market, like generous outdoor space equipped with free wireless Internet access, including a koi pond with a waterfall, an “urban swimming pool” with an outdoor kitchen for parties, and another courtyard “just to sit and meditate,” says Bogardus.