At the moment, Aspen Heights Partners doesn’t have any people renting units who aren’t college students, but in the not-too-distant future, they’ll have thousands, including renters in the largest residential building west of the Mississippi River.
The Austin-based company got its start in 2006 and has since made waves developing student housing projects, including its first three at major universities in Texas – Baylor twice and Texas A&M. It owns and operates 17 properties and has developed more than 25 total across the country, except for the West Coast.
Now, though, Aspen is expanding its focus, acquiring land and developing properties in the conventional multifamily realm. Founder and CEO Greg Henry says Aspen will deliver its first two apartment projects – one a 330-unit building in south Austin and the other a 220-unit high-rise in downtown Austin –in 2016.
But those projects aren’t the only ones Aspen has lined up for Austin. The company recently broke ground on The Independent, which will stand 58 stories tall and contain 370 condo units. Henry says the project will be a three-year build and feature “the best” amenities in the city, including a 36th-floor outdoor area, wine bar, gym, and movie theater. The tower will have a staggered design with large windows on every floor.
Once completed, The Independent will be the tallest residential building in the city, but that wasn’t Henry’s plan when he and his team decided to get into the apartment and condo world. Austin’s zoning codes are unique and intensive, Henry says, but the land where The Independent is being built is outside those parameters. Since Aspen wanted around 400 units, 10-foot ceilings, and large floor plans, the blueprints for the project came organically, he says. In fact, there was talk of building taller. “We could’ve gone higher than we did,” he says, “but we didn’t want to put too many more units on.”
There was some uneasiness from Austin residents about constructing a 58-story building, Henry says, but the feedback was mostly positive. “Austin is a very paradoxical city,” he says. “It’s got lots of different cultures and so we felt like, and have seen, that this building with its unique design really makes sense for the city. I was very pleased with how well it was accepted.”
The first discussions to get into conventional multifamily development came in 2012, Henry says. Aspen was already a fully integrated company, meaning they have their own development, construction, property management, asset management, and marketing departments. The people who lead these departments, Henry says, have experience in the conventional multifamily world, which, paired with the company’s successful student-housing track record, was reason to make the jump.
“A lot of the markets that we’re targeting are markets around universities,” Henry says. “So these students are graduating and becoming our customers. They’re familiar with us, not only from a brand standpoint but we also know that demographic – the young professional – because we’ve been following them since college.”
Aspen has land deals in eight markets, but Henry didn’t want to disclose the locations besides Austin since the partnerships haven’t been announced yet.
Henry says he’s cognizant of the potential for apartment saturation in some markets, adding that Aspen is quite cautious, turning down nine out of every 10 deals that comes their way. Still, he says, it’s a good time to get into developing apartments and condos.
“Overall, we still see lots of room to run, but every market has potential for being overbuilt or having too much product online, or the pricing gets pushed too hard,” he says. “Human nature, forever, repeats itself and overdevelops. We’ve got to be really conscious of that rhythm and make sure when we go in and develop in one of these markets that there are lots of reasons to believe the momentum and the demographics and all the things that we’re seeing are what we believe they are.”
It’s Aspen’s goal to give each specific market something it needs. “When we go into these markets it’s making sure we really do our due diligence and make sure each project and deal we’re after has a unique, special story behind it,” Henry says. “We’re not going to develop a product-type into these markets and just hope the market accepts that product-type like some people do. We’re going to design and match the best products for what is needed in a certain submarket.”
That process is now underway for Aspen in the ultra-competitive space for land and projects.
