Silicon Hills Nabs Tech Giants and Investors

AUSTIN, TX—North Austin as a whole is referred to as Silicon Hills due to the density of high-tech employers setting up campuses in the surrounding areas of The Domain, a 300-acre mixed-use development that is becoming known as Austin’s second urban core. It stands to reason that US News & World Report named Austin as the number one city in its 2019 Best Places to Live report for the third year in a row.

Above all, the need for housing is a given here, luring investors as well, hence the sale of Enclave at Water’s Edge, a 184-unit garden-style asset. The community is less than two miles from The Domain.

Patton Jones, Newmark Knight Frank vice chairman, represented the seller, San Francisco-based Hamilton Zanze, a multifamily investment firm with a focus on value-add properties, in the trade to Memphis-based LEDIC Realty Company, an owner/operator of affordable and workforce housing. The property sold for an undisclosed price.

“The value-add opportunity available as a result of the renovation potential of Enclave at Water’s Edge coupled with the property’s fantastic location minutes from The Domain garnered significant investor interest,” said Jones. “Investors are particularly interested in North Austin as of late due to Apple’s planned $1 billion campus, the new soccer stadium under construction for Austin’s first MLS team and continued expansion at The Domain.”

Constructed in 1986, Enclave at Water’s Edge is a highly amenitized asset, ripe for interior upgrades.

“Value-add is wildly popular in Austin because with the immense employment growth, affordable living is hard to find,” Jones tells GlobeSt.com. “Developers only build luxury product. Therefore, ‘80s vintage communities are providing the workforce housing for Austin. Investors can acquire ‘80s vintage assets below replacement cost, put some lipstick on them and still be priced below the class-A luxury product, and thus provide the much-needed workforce housing.”

The Domain is to feature more than 1.8 million square feet of retail and entertainment space, plus more than 4 million square feet of class-A office space when complete.

The property is surrounded by high-tech employers such as Amazon, Apple, Facebook, Indeed and Vrbo (formerly HomeAway). Apple’s current 38-acre campus and its soon-to-be 133-acre expansion are approximately four miles away. At full build-out, the capacity will be enough for 15,000 employees, which would make Apple Austin’s largest private-sector employer.

In addition, software company Zoho plans to relocate its US headquarters from the Bay Area to a new 375-acre campus in southeast Austin.

A Zoho company official was quoted as saying, “One of the things we value is quality of life for our employees and we felt that Austin provided that.”

Construction is expected to start on the Zoho project in 2020 with the campus opening in 2021, according to an NAI Partners office report.