Cencor Urban Properties Vertically Aligns Its Stars

Developing the vertical concept for office, multifamily and retail is as important to Terkel as the physical construction. First out of the Cencor Urban Properties' pipeline will be a $100-million, 22-acre, mixed-use development situated at the juncture of 45th Street, Lamar and Guadalupe streets and aptly called the Triangle. Cencor will be developing the 215,000 sf of office and retail space while Atlanta-based Post Properties will build the 800 multifamily units. A fourth quarter ground-breaking is planned and delivery in first quarter 2003.

What isn't widely known is that Cencor scouts are out in Austin for additional sites that would be well suited to what Terkel sees is a rising star in the development arena. Denver is a hotbed of such development, specifically in the LoDo area. In a year or two, Terkel says the Weitzman Group's new division will be looking for land in Dallas, Houston and San Antonio for more vertical projects. "Everything we'll be doing in our division will be vertical," he says. The division eventually will consist of three to five members.

Dallas, Houston and even Austin have some vertical projects, but they are considerably smaller than what Cencor has in mind. "I think we're just seeing the tip of the iceberg," Terkel says of the design strategy.

Austin is the city that Terkel knows best so that's where the division is based and that's where the work's starting. "It's got a market that's hungry for this type of project so it's a logical place to start," he says. Austin city government is kicking in an estimated $7.4 million toward infrastructure, waiving fees and buying parkland in the project to show its support.

Terkel, as he plans to tell IREM today, says there are four key ingredients for a successful vertical development. First, there must be two or more uses to the project. Density should be high and city blocks should be short. Ideally, there should be a mix of old and new buildings. That's not the case with the Triangle, but as Terkel says, "You can't have everything."

The Triangle is a go at this stage in the economy. "We don't anticipate any impact on the construction start," he says. "But, we'd be awfully foolish not to watch it carefully."

EnviroPlan of Austin is the architect for most of the retail and office and Heights Venture of Houston is designing the 60,000-sf Randall's grocery store that has been incorporated into the master plan. Post has yet to select its multifamily designer. White Construction of Austin has been selected as the general contractor for the office-retail components for the nine-building development. Even the rates are set. Retail will range from $26 per sf to $35 per sf and office most likely can be had for the low $20s per sf, according to Terkel.