(Read more on the multifamily market.)

AUSTIN-In its first joint venture with Gables Residential Services Inc., a local developer is gearing up to break ground in the next month on a $35-million mixed-use project just west of the Downtown. The Pressler will have 160 luxury apartments situated above 26,500 sf of street-level retail space.

Atlanta-headquartered Gables has signed a 99-year ground lease with land owner Capital City Partners Inc. Gables also has leased the air rights. When the project is completed by November 2008, Capital City Partners will acquire the shell back at a fixed cost. “They’ll operate the residential side and at the same time, we’ll be managing the retail,” Joe Lamy, Capital City Partners’ principal, says about the two-acre project at Fifth and Pressler streets.

The property currently houses about 20,000 sf of retail space, vacated by local businesses that have been relocated. Lamy tells GlobeSt.com that the buildings will be demolished next month to make way for the new project.

“On this particular project, the neighborhood groups in the area were very organized and very specific about what they wanted and didn’t want,” Lamy says. “We were able to work very effectively with them to get this zoned and to move the general permitting in the right direction.”

Lamy says another aspect heading in the right direction is the joint venture. It’s worked so well that Capital City Partners is examining other opportunities with Gables.

In the meantime, Lamy points out that Austin’s West End continues to flourish. “This is an area that is definitely in a redevelopment phase,” he says. “It’s where you can be close to the CBD. I think Gables will do very well with the project.”

The residential development will primarily will consist of one- and two-bedroom units, hovering 900 sf to 1,000 sf. Gables hasn’t firmed up rental rates. On the retail end, Aquila Commercial LLC of Austin is handling the leasing. Looney-Ricks-Kiss Architects Inc. of Memphis is the project’s architect.

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