By Cara Smith-Tenta – CoStar Analytics
Greystar Project Reflects Tech Hub’s Growing Demand for Micro Unit Apartments
Apartment giant Greystar is planning to build micro-units, or tiny apartments, in Austin, Texas, bringing what had been largely a coastal development trend to the city that’s increasingly attracting West Coast companies to build in the area.
The company, one of the nation’s largest private apartment development and investment firms, told CoStar News it has broken ground on Symphony Square, a mixed-use development at the intersection of Red River Street and 11th Street, in Austin’s downtown core. The project is designed to include 388 apartments, 160,000 square feet of office space and 5,000 square feet of retail and restaurant space.
The project’s residential tower, dubbed The Waller, is meant to offer one-, two- and three-bedroom apartments, as well as what it describes as “micro-studio” units. The company did not disclose the size of the small units, but the Urban Land Institute, a housing and urban planning research group, defines a micro-unit as ranging from 280 square feet to 450 square feet.
Micro-units, which often provide just enough room for essential furniture, are designed to offer lower rents in exchange for tight quarters. They can be an option for some typically young, single workers who want to live in the heart of a major city, like Los Angeles or somewhere in the San Francisco Bay Area, but can’t afford the price of a studio or one-bedroom apartment or simply see their apartments less as an oasis and more as a crash pad.
Such units have been especially popular among tech workers, who often work long hours and need to live near the office in more expensive cities. Buildings with micro-units often offer spaces for residents outside their dwellings. At Symphony Square, plans call for amenities including reservable private offices, a coffee shop and several coworking areas that could allow micro-unit dwellers to work or socialize outside their apartments.
Still, buildings with tiny units generally aren’t just built anywhere. They’re typically developed in higher-priced cities with the unique kinds of workforces that could support the property type. And they can have limited appeal because not everyone wants such tight quarters, particularly after more than a year of living with pandemic restrictions.
With the Symphony Square project, Greystar seems to be betting on Austin’s status as a tech mecca that’s lured some of the country’s largest companies to the Lone Star State as generating enough demand for such apartments. The city has also ranked high in recent years in rankings of U.S. cities favored among investors.
For instance, Tesla billionaire Elon Musk’s electric car company, is among the West Coast companies expanding in Austin. The company’s newest U.S. electric car plant is rapidly progressing there, and a Tesla affiliate filed plans in May for a new industrial facility on 150 acres just east of Austin. Meanwhile, iPhone maker Apple is developing a $1 billion campus that is expected to open in North Austin and have roughly 5,000 employees.
The specific location of Greystar’s project within Austin seems to be positioning it to capture tech and other workers with typically long hours as well. The Symphony Square mixed-use project sits within the Austin Innovation District, a master-planned development in early stages on more than 120 acres in downtown Austin. The district, which developers hope will further catalyze development in the healthcare, technology and life sciences industries, is expected to be anchored by an office tower being developed for the University of Texas at Austin.
Before the pandemic, Austin’s burgeoning offering of micro-units was gaining momentum. In 2019, Transwestern Development Co., a commercial development firm based in Houston, began development on Block 36, a 263-unit micro-unit development in Austin. Also in 2019, the company began work on a 147-unit micro-unit development in Austin at 817 W. 12th St. that is scheduled to deliver in 2022.