by Mark Daniel, Vice President of Partner Relations at RealMassive, A.B. Economics Stanford University
Construction cycles typically vary by geography and project type – though some booms and busts (ala 2009) can be generally felt in most metropolitan areas, while factors that hit specific sectors (like oil and gas) can create counter-cyclical activity in dependent metro areas.
Austin, Texas is considered a tertiary market by most capital sources, yet this current cycle has attracted an unprecedented amount of attention, and money. Apartment construction in particular has risen to levels never tested, has stayed there for years, and the new properties are filling up quickly and at rents well above the historical norm, even when adjusted for inflation. Asking rents for office space in the CBD stand at $37psf/yr *(source: www.RealMassive.com). For comparison, the Uptown/Turtle Creek submarket in Dallas comes in around $31.