East Austin Developments Buck Slowdown in New Starts

4 September 2024

Hundreds of new apartment units are slated for development in East Austin, a sign that builders are ready to jump back into the area after a slowdown in multifamily development.

Developers are moving forward with two projects that will create hundreds of new units in East Austin: a larger 360-unit development called 7th & Pleasant Valley and a smaller, 44-unit complex known as 1307 & 1309 East 4th Street, the Austin Business Journal reported.

Austin-based developer OHT Partners is building the larger of the two developments. The project, according to a site plan application, will include 360 multifamily units and sit on roughly three acres at 2730 East 7th Street.

In addition to the residential units, the development will feature 13,000 square feet of office space, bringing the total footprint of the project to 578,500 square feet. Before construction can begin, the project will require the demolition of a vacant retail building previously occupied by an Advance Auto Parts store.

Since its founding in 2010, OHT has developed 33 multifamily properties across Texas, 14 of which are located in the Austin metro area. The company has yet to comment on the planned development.

The second development is being built by JLCC Interests, a company linked to the private wealth management firm 512 Asset Management. The apartment project will add 44 units to just over a quarter of an acre across the street from Scoot Inn bar.

Like the larger project, the development of 1307 & 1309 East 4th Street will also necessitate the demolition of existing structures, including a 3,200-square-foot single-family home and a 1,500-square-foot duplex.

These new apartment projects come at a time when Austin’s rental market is experiencing mixed signals and unsteady deal flow.

Rental rates in Austin have been on a steady decline since the summer of 2023, with the average price per square foot dropping to $1.72 in August, a roughly 7 percent decrease year-over-year, according to a recent report from ApartmentData.com. The average monthly rent for an apartment in the city stood at $1,524 in August.

Occupancy rates, which hit a low of 83 percent in March, ticked up slightly to 84.5 percent in August.

As of August, the Austin metro area had a total apartment inventory of 328,166 units across 1,351 communities, with 25,497 apartments under construction and an additional 32,204 units proposed.

— Andrew Terrell