In Brief

Austin Business Journal - March 23, 2007

by A.J. Mistretta

ABJ Staff|

Local real estate professional Mitch Ely wants to build a five-story, 162-unit project dubbed South Urban Lofts on the roughly two-acre site at 4276 S. Congress Ave., just south of Ben White Boulevard near St. Elmo Road. The $50 million project, which will also include 18,000 square feet of retail and restaurant space, would be the second loft development along the stretch of Congress below Ben White -- an area dominated by used-car dealerships and pawn shops that many real estate insiders believe will be completely transformed in coming years.

Prices will start around $180,000 for an 800-square-foot unit and up to about $350,000 for a 1,500-square-foot loft, says Deacon Shields, a manager with Ely Properties, which will market the project.

Operating under the ownership name South Urban Lofts, Ely is seeking a zoning change on the property that would allow for building height up to 75 feet instead of the 60 feet allowed under the current designation. The change would allow the project to go up to five stories, allowing for up to 162 units. The height would also accommodate a planned six-story parking garage. The Planning Commission decision on the request was postponed earlier this month until March 27.

Shields says as property prices continue to rise in the SoCo District immediately south of downtown, a growing number of developers are looking to the area on the other side of Ben White and finding much more affordable opportunities.

"You still have a straight shot down Congress to downtown and great views, so it makes sense to explore in this area," he says.

The St. Elmo-Tel, which has been defunct for years, is one of the last of the motor court inns along South Congress to be transformed. The chic Hotel San Jose and retail development 3100 are among the properties that have been remade to reflect the evolution of the avenue. Near the intersection of Ben White, a San Francisco developer recently purchased the Don-Mar Motor Court with plans to replace it with 64 lofts and ground-floor retail.

Stratus Properties for sale

March 16 | Citing the company's collection of valuable assets and projects, and the strength of real estate capital markets, officials with Stratus Properties Inc. said they're putting the company up for sale. With assets including the Barton Creek community, Lantana and downtown's Block 21, publicly traded Stratus (NASDAQ: STRS) is one of Austin's biggest developers. Stratus CEO Beau Armstrong says now is the right time to explore the company's options. "In light of the vibrant real estate market in Austin, Texas, the strong performance of the real estate capital markets, and the interest expressed by investors over the last 12 months in partnering with Stratus on several of our projects, we believe that it is in the best interest of our shareholders to explore all possible strategic alternatives to maximize shareholder value," he says. Stratus has retained JPMorgan Chase & Co. as its financial adviser to assist in the sale process. Stratus is currently working on a $225 million project on Block 21 across from City Hall that would include condos, offices and a W hotel. The company is also a partner with Trammell Crow Co. on the mixed-use Crestview Station project on North Lamar Boulevard. The decision to seek a buyer was revealed in Stratus' fourth quarter earnings, recently released. For the quarter ending Dec. 31, Stratus reported net income of $3.2 million, or 41 cents a share, down from $4.7 million in the fourth quarter of 2006. For the full year, the company's income totaled $40.3 million in 2006, up nearly fivefold from the $8.5 million it recorded in 2005.

Condos, shops slated near Zilker Park

March 5 | Former Schlotzsky's Inc. executive John Wooley is hoping to turn a green patch along Zilker Park into greenbacks. The Austin City Council approved a zoning change to develop a one-and-a-half acre tract along Barton Springs Boulevard into a mixed-use condominium project. The area is across Sterzing Street from popular Tex-Mex haunt Chuy's and is owned by both Wooley and Marjorie Saad. City planner Robert Heil says the project is zoned for almost any commercial use up to 60 feet high but, because it is in the vicinity of Town Lake, it can also have residential uses. The project will include 128 condos, city planning documents say, and 10,000 square feet of retail space.

Business park for 'green' companies planned

March 8 | When Kerry Getter and his team began looking for 10 to 15 acres on a rail line somewhere in Austin to expand the operations of his company, Balcones Resources Inc., they found few options. So he started thinking bigger. "We've always had this vision of trying to create an [environmentally friendly] business park, and we decided there was no time like the present," Getter says. Balcones Resources, the parent company of Balcones Recycling and Balcones Fuel Technology, is now under contract to purchase 125 acres in East Austin south of U.S. Highway 290 near Decker Lane. The seller is Houston-based Tejas Viejo Land Co. Balcones, which will relocate and expand its local facilities on about 15 acres at the site, wants to create an "environomics park" on the remaining acreage where green-focused companies across various industries would be able to come together. "We would like to create something in Central Texas that would be the first of its type, a model of environmental stewardship," says Getter. Balcones Resources plans to invest $7 million in its new 120,000-square-foot headquarters and recycling plant, including new equipment. Groundbreaking is slated for this fall. The company declined to say how much it is investing to take on all 125 acres. The plan is a major one for Balcones, which has not been involved in the development business before. The Austin office of Stream Realty Partners LP, which helped Balcones land the tract, has also been tapped to market the remaining land parcels to companies focused on such areas as alternative energy research, green-energy use and clean and sustainable recycling initiatives. The group is currently in talks with several land-planning firms.

Downtown Omni Hotel to be sold

march 15 | The Omni Austin Hotel Downtown is under contract to be sold to Delaware-based investment group Walton TCC Hotel Investors. In an attempt to become a leaner office REIT, Crescent Real Estate Equities Co. (NYSE: CEI) of Fort Worth is off-loading its lodging assets. The company has agreed to a $550 million deal with Walton TCC to purchase seven properties, including the 375-room Austin hotel at 700 San Jacinto Blvd. The transaction, which includes another Texas hotel -- the Renaissance Houston -- is set to close sometime in the second quarter, according to a form filed with the Securities and Exchange Commission. The Omni is part of the Austin Centre office building, which is also owned by Crescent. A spokesman for Crescent says the company has legally separated the two properties to allow them to be purchased by separate owners. Crescent is also marketing its entire Austin office portfolio, which includes Austin Centre, 816 Congress, 301 Congress and the suburban Avallon complex. C.B. Richard Ellis has been tapped to market the office assets.

Online property database in the works

March 8 | The Central Texas Commercial Association of Real Estate Professionals Inc. has inked a contract with Catylist Inc. to create a new regionwide property information exchange system. CTCAR has spent the last few months evaluating proposals and interviewing companies to take on the formulation of a new marketing-based Web site to provide information on available commercial real estate properties for sale or lease throughout Central Texas. The site will launch in April. The organization's 300-plus members will have access to the full system, allowing them to market properties locally and nationally, promote themselves, create marketing presentations and communicate with professionals across the country. "Catylist will provide CTCAR the ability to service our 26-county area with an information exchange service that will give our members the ability to promote their listings locally, nationally and internationally," says Cathy Coneway of Stanberry Commercial and 2007 president of CTCAR. "The 'Haves' and 'Wants' email blasts will provide immediate exposure for our property listings to the entire Central Texas region. Catylist has proven to be the most progressive, cutting-edge database exchange product on the market today." The public will also be able to view information on members, companies, and search available property listings at www.ccimnet.com.