Condos set for Bee Cave
Tenn. company plans $160M project
Austin Business Journal - July 20, 2007
by A.J. Mistretta
ABJ Staff

A Tennessee development company sees a lot of promise in Texas.

With several projects ongoing in the Dallas area and another planned near Houston, Southern Land Company LLC is breaking ground next month on Cielo, an 18-acre project in Bee Cave.

Phase one of Cielo will feature 159 condos, town homes and flats ranging in price from $400,000 to $700,000. The entire project will eventually include about 400 for-sale attached units and could take six years to finish. The total build-out value of Cielo is estimated at around $160 million.
Southern Land owns about 200 acres surrounded by the massive Balcones Canyonland Preserve. The company can only develop 18 acres of that land, leaving the rest as green space. As the project ramps up, Southern Land will have about 10 staffers on the ground in Austin.

Franklin, Tenn.-based Southern Land is the third-fastest-growing company in Middle Tennessee, according to rankings from the Nashville Business Journal. Southern Land logged revenue of more than $100 million in 2006, an increase of 72 percent over the previous year. The company with a development pipeline worth $1.25 billion says it's expecting revenue on the order of $150 million this year.

Jim Cheney, director of communications for Southern Land, says the company tends to gravitate toward opportunities in the suburbs surrounding large cities. Its biggest project so far -- the 2,700-home Westhaven community -- is situated on 1,500 acres in the company's Tennessee hometown, just outside of Nashville.

One of the things that make Southern Land fairly unique is its internalized approach to the business. Instead of outsourcing components such as engineering or architecture, the company handles just about every aspect of its projects in-house. With 325 employees working in areas from landscaping to marketing, Southern Land has developed an integrated model focused on quality control, Cheney says. "We carry the project through the entire process, from acquisition to the creation of the homeowners association," he says.

Southern Land began looking for opportunities in Texas in 2003 and opened its Dallas office concurrently with the launch of two suburban projects near that city last year. The company's second-largest development to date, the 2,200-home Tucker Hill community, is located north of Dallas in McKinney. Southern Land also has developments in Allen and Keller and is preparing to start a project with a joint venture partner outside of Houston in Sugar Land.

Cheney says the company chose Texas as its first development play outside of Tennessee because of the similarities in industry and demographics between the two states. For its part, Austin is often compared to Nashville -- another expanding city with a strong music culture that's known for quality of life.

Southern Land focuses heavily on architecture and horticulture in its developments. On the architecture front, the company's project planners look to examples of established, older neighborhoods across the country for inspiration. Cheney says today's builders "have a tendency to borrow and piecemeal architectural styles ... but we look to create authentic character instead of duplicating patterns." Cheney says proper landscaping also adds significantly to communities, creating a sense of place and making them more pedestrian-friendly. Like Southern Land's other communities, Cielo will have a residence club staffed by an activities director who will coordinate events according to residents' interests, from wine tastings to speaker series.

"We've found that it's a very good vehicle to draw people into the community and get them engaged," says Cheney. Cortney Curtis, Realtor liaison in Austin for Cielo, says the Bee Cave location is a great example of what the company looks for. As Austin's population grows, more people will want to live in areas that embody the quality of life they're seeking. The site, with its rolling topography, location near Lake Travis and manageable distrance to downtown, make it ideal for those who want the feel of a smaller community without sacrificing luxury, she says.

Cielo is also near Hill Country Galleria, the 1.3 million-square-foot outdoor retail center anchored by Dillard's and Cinemark and debuting in the fall. Real estate observers have credited that emerging project at State Highway 71 and RM 620 with increasing residential momentum in the area southwest of Austin. People living in Bee Cave, Lakeway and communities beyond will not have to drive into Austin for basic retail needs once Hill Country Galleria and, smaller projects popping up peripherally to it, open.