Tallest Building's Retail Comes To Market

The retail portion of the property at 360 Nueces St. comes to market at an interesting time as most of the 430 units have been either sold or are leased up. "The condos are 99% sold out," says Michele Gary, vice president with the Weitzman Group's Austin office. Gary and Weitzman colleagues president and brokerage director Lance Morris and associate Adam Zimel, have the listing on behalf of project developers Novare Group Holdings LLC of Atlanta, GA and local Andrews Urban LLC.

Gary tells GlobeSt.com that the space was delivered in September and is already leased up with mostly local boutique tenants including Mullberry, Garrido's, Optique and Lara Reynolds Gallery. According to the offering statement, the projected NOI is $434,198 for the first year, with the tenth year expected to generate $524,796.

Meanwhile, on the residential side, the condo sales occurred in record time, Gary says. In response, the developers are seeking out lots for future development. "They've identified lots for future development, but the plans are on hold," she comments.

Morris tells GlobeSt.com that the ideal buyer for the 360 Condo's retail portion would be a long-term holder that understands the dynamics of downtown residences with limited retail. "That's a pretty wide range of potential purchasers, anywhere from those coming out of 1031 exchanges to people who specialize in retail," he adds.

He says buyers similar to the California investor that recently acquired ground-floor retail space in the residential-retail 4020 Scottsdale building in Scottsdale, AZ would be welcome. In that situation, the buyer used money from a 1031 exchange to pay for the asset.

Meanwhile, Gary predicts that similar ground-floor retail opportunities for investment will hit the Austin market. One reason for that is because the city of Austin has mandated that downtown towers with residential components have ground-floor retail to promote an active environment.

As a result, "we're seeing more of these mixed-use types of development in Austin," Gary says. "More opportunity for ground-floor retail investment will start presenting themselves."