Q&A; Satterlee; Mass Transit encourages Q&A Speck; Architecture inspires Lifestyle
Satterlee: Mobility, mass transit essential for density (BELOW) See Speck Q&A
Austin Business Journal by Cody Lyon, Staff writer
Date: Thursday, December 8, 2011, 10:18am CST
- Cody Lyon
- Staff writer – Austin Business Journal
Ken Satterlee embodies Austin real estate and has the track record to prove it.
Satterlee started his career in 1977 with Coldwell Banker brokerage services — nowCBRE Group Inc. By 1980, Ken moved to Burnham Real Estate, nowCushman & Wakefield , where he became a significant owner of the company while building a highly successful brokerage practice. After 25 years with Burnham, he sold his interest in the firm and focused his full attention on his development and investment firm, St. Croix Capital Corporation , which he founded in 1982. St. Croix Capital is a fully-integrated real estate company and a full-service provider of development, investment, construction management and asset management acquisitions. Now at TIG Real Estate Services , Ken serves as president of the firm’s new brokerage division. I recently caught up with Ken to ask him a few questions about new projects, downtown office developments and what may stand in the way of Austin becoming a truly density-centric city.
ABJ: What projects are you working on now and why should we be excited to hear about them?
Satterlee: We are advising clients on a number of different projects. Among them are a new medical development that will feature individual free standing buildings for sale to doctors and groups out in the Bee Cave and Lakeway areas. We are also advising on the master planned Scottsdale Crossing project in Cedar Park. The first phase there will feature an office, flex and retail building with frontage on U.S. Highway 183A. Most recently, we assisted one of our institutional clients on the foreclosure of two office buildings in San Antonio, and will be handling the management, leasing, and rehabilitation of those properties. There are an unlimited number of opportunities out there.
ABJ: What types of financing patterns are you seeing for big projects these days?
Satterlee: Ground up development projects are still largely dependent on conventional bank debt and that is very difficult to obtain these days. Greater amounts of equity, and stronger and larger guarantees are prerequisites for bank loans. Pre-leasing or sales at percentages greater than in the past are also requirements. Acquisition debt is not as much in vogue. Most commercial property acquisitions are done on an all cash basis. Larger institutional buyers will bid with cash, and leverage later.
ABJ: Where are developers getting money these days?
Satterlee: For starters, they better have some of their own. Gone are the days of highly leveraged development deals. Institutional equity is still there for the right property, but the ownership structures are more highly tilted in favor of the cash.
ABJ: How easy is it for a developer to lure a joint partner to finance and develop large projects in Austin?
Satterlee: It’s good to be in Austin, isn’t it? It’s easier to be here than in many parts of the country. But to some of the larger equity entities — and lenders — Austin is still a second tier location. Those that are starting to look at it differently will benefit by getting here now, and getting some capital into some projects both to be built and existing. There are so many ingredients inherent in Austin to make it an international city. As our population grows, and our job growth hopefully grows with it, the magnifying glass will be focused here even more.
ABJ: When you look at the geopolitical landscape, are you concerned that events in Europe, for example, might impact Austin’s seemingly resilient economy?
Satterlee: Directly? I don’t see that. But indirectly, all of us, and our fair city are going to be impacted by events in Europe. Our banks are affected, and that affects us. We don’t need Europe to upset our financial markets though; we did that on our own.
ABJ: We’ve seen some significant trades in the suburban Austin office market this year. Is that a testament to Austin as an investment?
Satterlee: It’s a testament to Austin in general. It’s also an indication that our Central Business District is strong and getting stronger. Let’s face it, there aren’t a lot of high rise office buildings trading downtown. Many downtown landlords and property owners are watching to see what the state intends to do with their needs, along with the county, and to a lesser extent, the Austin Independent School District. All of those entities are located in the CDB, and they control or require large blocks of office space.
ABJ: Will we ever see new vertical office space construction in downtown Austin?
Satterlee: There’s no doubt in my mind and probably sooner than later. A number of deals are in the queue now.
ABJ: What is the biggest challenge to Austin becoming a density-centric city?
Satterlee: Mobility. Mass transit. The ability to get people in and out of the core in a timely way. I saw what happened in San Diego, first with the introduction of commuter rail, then the addition of light rail. The commuter rail will begin to work, when people can step off the train, and board another that will take them into the micro neighborhoods of downtown. I know it’s expensive, and I don’t have the answers on how it gets paid for, but I have seen it work, and I know what it can and — I predict will do — to center the city of Austin.
Speck: Architecture influences lifestyle
Austin Business Journal by Cody Lyon, Staff writer
Date: Thursday, October 27, 2011, 10:27am CDT
- Cody Lyon
- Staff writer – Austin Business Journal
The professional portfolio of architect Larry Speck, principal at PageSoutherlandPage, boasts several Texas landmarks, including the Austin-Bergstrom International Airport , Austin Convention Center and Discovery Green, a new 12-acre park in downtown Houston.
Over the last 25 years, his design work has won 33 national design awards, 21 state and regional design awards, and 63 local design awards. Speck has been a faculty member at the University of Texas since 1975. I was able to catch up with him and ask about what goes on between developers and architects, and his thoughts on density.
ABJ: Do you agree with the theory that density-driven development is a smarter way to grow Austin?
Speck: I definitely believe this to be true. I would even go so far as to say this is not so much a theory as just a fact. Denser development, of course, consumes less land and creates less sprawl, leaving more of the natural ecosystem intact. It uses substantially less water because there are fewer lawns. That also means less fertilizers and other water pollutants. It creates less impervious cover, not only because of stacking in buildings, but also because there are less driveways, roads and highways to provide access to dense development rather than dispersed development. It means less public investment in longer and more inefficient utility runs for power, water, sewer etc. I could go on and on.
But, for me, one of the best things about density is the lifestyle it offers. There are many opportunities for convenience, efficiency, time saving and for a sense of community that are just not there at lower densities. I live on the 11th floor of a high-rise building downtown — just a few minutes from both my architecture office and my UT office. I can walk to the grocery store, dozens of restaurants, a growing assortment of retail stores, miles of hike and bike trails, many venues for film, music, theater, etc. There are excellent schools nearby at every level from kindergarten to university. I have great neighbors I have gotten to know much better than I ever got to know my neighbors before. I could never get all those assets at low density.
ABJ: Describe the process that takes place and how you arrive at a final vision when you work with a developer and others on a big project.
Speck: This is always a give-and-take process that requires real teamwork. The client is bringing their needs and requirements to the table, and we are trying to help them find the best solutions. We love to provide lots of alternatives at the beginning and let everyone around the table try them on for fit. On the 2400 Nueces project, for example, we looked at three radically different densities. They each implied a different structural system, a different parking solution and a different price per square foot. Each one generated a pro forma that had the potential for working. We evaluated all of them as a group to find the very best solution for this instance. When we had a general direction, then we could drill down to the next level and provide options again for unit types and layouts, kinds of public spaces, materials/finishes etc. At every step we are working with the client, contractors, engineers, and even marketing people to find the very best design with which to proceed.
ABJ: Do you believe architecture has the power to inspire? How much do skylines define a city?
Speck: Architecture certainly has the power to inspire, but it actually goes much deeper than that. Architecture has a profound influence on every aspect of our everyday lives. Our lifestyle, the patterns of our day, our relationships with the people around us, our success and satisfaction in our jobs are all shaped significantly by the physical environment. If a person works in an isolating cubicle in a rat-maze office, commutes on traffic–snarled freeways, eats most meals at anonymous fast-food joints and lives in a cookie-cutter subdivision that does nothing to promote neighborliness, then he or she may well be depressed and unhappy. If that same person works in a well-designed office with carefully managed places for privacy/teaming/communication, walks a few minutes on pedestrian-friendly streets to work, shops at friendly local stores, eats at distinctive cafes run by personable entrepreneurs and lives in a place that, by its arrangement of spaces, encourages casual encounters with neighbors, then they will have a very different life.
Even if we are unconscious of the degree to which architecture is affecting our lives, we are still operating under its power. How much money we spend on gasoline, electricity, other utilities and mortgage are all a result of what kind of architectural environment we inhabit. How much time we spend commuting, hauling friends and family from place to place, doing yard work, cleaning and maintaining our houses are also all a result of what kind of architectural environment we inhabit.
Winston Churchill said, “We shape our buildings; thereafter, our buildings shape us.” He was right.
The image of a building has the ability to inspire, but that is a very small fraction of the power of architecture. The skyline of a city has the ability to impress, but the city is defined far more by the way the streets, public spaces, buildings, offices, shops, entertainment spaces, residences, etc. work together to become an influential crucible for people’s lives.
ABJ: What are the biggest challenges for architects today?
Speck: True sustainability is a longstanding and continuing challenge for architects. About 50 percent of energy consumption in the U.S. is in buildings, and another big chunk of consumption comes from urban design that makes our lives very energy inefficient. We have a lot of work to do here, and it goes way beyond just getting LEED points. I am giving two different talks at the Texas Society of Architects Convention in Dallas at the end of this week that deal in different ways with sustainability — one on how to combine these issues with what has classically been termed good design and the other having to do with integration of alternative energy sources in buildings. This is a major issue for our profession these days.
Another big challenge is how to make good design more accessible and affordable for more people. Many people think of architecture as the making of expensive baubles they cannot afford. Unfortunately, the media has reinforced that notion by making heroes of star architects who often do produce flashy, very expensive object buildings. That is not actually what the field of architecture is about. It is a tiny fringe of a profession that is really about making large numbers of peoples’ everyday lives better through the built environment.
ABJ: Looking into your crystal ball, what sort of city do you see Austin becoming?
Speck: I love practicing architecture in Austin because I think the potential for creating a livable, sustainable city may be greater here than in almost any city in the country. In our downtown core we inherited an amazing confluence of natural beauty, a sensible relationship between the Central Business District, state government, the university and a ring of great supporting neighborhoods. These were all well-planned and executed in the first century of the city’s history.
In the last 25 years — since the Town Lake Comprehensive Plan kicked off a new generation of urban thinking in the mid-1980s — we have capitalized on Lady Bird Lake as a great urban asset, consolidated cultural venues and events in the core, established a great mixed-use district in downtown and maintained strong neighborhoods around the core enriched by funky incubators for weirdness like SoCo.
The next step will be to create a light rail that will reduce car dependence and traffic congestion, and a network of bikeways that will allow people to use alternative personal vehicles in a safe, healthy manner. The transformation of neighborhoods with mixed-use nodes of activity should spread out from the core to the next ring of the city making those communities modestly denser in the process. The periphery of the city will become more tight-knit and independent towns including Leander, Lake Travis, Round Rock and Kyle, that will each have their own centers of business and retail so that these are not just bedroom communities. If people do commute into central Austin on a daily basis, commuter rail will offer a better alternative than sitting in traffic on clogged up freeways.
In my crystal ball there are no whiz-bang gimmicky ideas, there is just a steady progression of creative, good sense solutions to very real problems that are currently deterring people from living the most pleasurable, productive and interesting lives possible.
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