Another big apartment project planned for Austin's booming South Lamar area
As many as 400 apartments are planned in a new project along South Lamar Boulevard, a heavily traveled road that's already a hotbed of new rental construction amid the Austin region's booming multifamily market.
Endeavor Real Estate Group plans to construct a nine-story apartment building at 517 S. Lamar Blvd., just south of Barton Springs Road, with a maximum of 399 units. That's according to documents filed with the city of Austin by a representative for Austin-based Endeavor, which is seeking a zoning change to build the project.
The property is now home to Trek Bicycle Lamar and an urgent care center. The site is near a McDonald's restaurant and Peter Pan Mini-Golf, a popular entertainment spot on Barton Springs Road.
Endeavor has a contract to buy the 1.87-acre site where the apartment project would be built, said Richard Suttle Jr., the Austin land-use attorney representing Endeavor in its zoning request. The Austin City Council will have the final say on the requested zoning change.
Demolition on the existing site likely wouldn't start until at least the fourth quarter of 2024 at the earliest, with construction on the apartment building to follow.
Along with apartments, preliminary plans call for 10,000 square feet of retail and restaurant space, as well as underground parking, according to city documents.
Apartment building boom
If the City Council approves the zoning change, Endeavor's project would be part of a surge of apartment construction along one of the city's most heavily traveled corridors, where hundreds of new apartment units are underway or planned.
The South Lamar corridor mirrors what's happening in the Central Texas region as a whole, where apartment construction is rampant across the five-county area extending from Georgetown to San Marcos.
Suttle said the 399 apartment units mentioned in the city filing is a cap. With the project being early in the planning stages, he did not specify an exact number of units but said "it will be in the 300s."
Suttle said that at least 10% of the units to be reserved for households making less than 60% of the median family income in the Austin area.
Under federal guidelines, the median family income for a family of four currently is $98,900 in the Austin region. So at 60%, the figure works out to $41,580 for a one-person household, $47,520 for a two-person household, $53,460 for a family of three and $59,340 for a family of four.
In the Austin area, Endeavor has developed numerous residential, office and mixed-use projects, including the Domain and Southpark Meadows, as well as apartment towers downtown.
Endeavor also is the developer who, along with members of the Cox family that formerly owned the American-Statesman, is working on plans to build a mixed-use project with multiple high-rises on the site that formerly housed the newspaper's offices. The 19-acre site is on prime property on Lady Bird Lake's south shore.
Road improvements planned
Charles Heimsath, a longtime Austin-based real estate consultant, said he would expect Endeavor's South Lamar project to be a successful development for the company.
"Endeavor is well know for developing extraordinary projects that achieve top of the market rents, and this project will also be a great addition to the South Lamar corridor," said Heimsath, president of Capitol Market Research and who was not a consultant on the project. "While there are other projects underway in the area, this corridor has consistently shown an ability to absorb hundreds of new units. More density in major transportation corridors will go a long way toward solving our mobility crisis while maintaining our high quality of life."
The city has plans in progress to increase mobility and safety along South Lamar Boulevard, an initiative that Suttle said should help as more development is added along that major north-south corridor.
Along with a plethora of apartment projects along South Lamar, projects just north of Barton Springs Road include a planned seven-story office building at a former Schlotzsky's location on Lamar south of Lady Bird Lake, and the Loren, a hotel and condominium project being built at West Riverside Drive and South Lamar Boulevard, across from the Butler Pitch & Putt golf course.
"Corridor improvements are designed to increase carrying capacity of roads like Lamar," Suttle said. "Improved access, driveway adjustments, and lane re-configurations along with enhanced bicycle and pedestrian facilities will increase the capacity and efficiency of moving people along Lamar. Time will tell but hopefully the improvements proposed by the city will improve mobility."
Population growth fueling demand
Endeavor's proposed project comes as Central Texas' apartment market continues to set records as the region adds jobs and people.
Last year, developers completed about 13,000 apartment units — the most ever documented in one year in the Austin metro area, according to a twice-yearly apartment survey Heimsath conducts. During that time, 19,000 units were leased on a net basis (counting move-ins and move-outs) — twice as many as the market has ever absorbed before, Heimsath said.
Across Central Texas, the apartment occupancy rate averaged 94% at the end of 2021, the highest level since December 2015, Heimsath's survey showed.
As of the end of 2021, RealPage, which tracks the market locally and nationally, put the Austin area's occupancy rate at 97.1% — "the highest ever seen in Austin," Carl Whitaker, a RealPage economist, told the Statesman earlier this year.
Nationwide, 2021 was a record for year-over-year growth in apartment rents, and Austin was among the top 10 markets for rent growth, according to RealPage.
Taking into account apartment units of all sizes, rents rose by 15% on average last year in the Austin metro area to $1,522 per month by the end of last year, Heimsath's survey found.
That's more than 1% per month last year, "which is just unbelievable — absolutely unprecedented," Heimsath said in reporting his year-end numbers early this year.
"We've had periods of rent escalation, but to have 12 months of sustained rent growth month over month, ending the year at 15%, is unprecedented," Heimsath told the Statesman earlier this year.
Experts have said that, although apartment rents are forecast to keep rising in the Austin market, the pace of rent growth is expected to slow some as new supply is added.
In its monthly rent report for May, online rental platform Zumper said Austin ranked as the second most expensive city to rent in the metro area, after Georgetown.
The price of one-bedroom units in Austin fell 0.6% month-over-momth, to a median of $1,550 per month, while two bedroom units decreased 0.5% to $1,930 a month, Zumper said.