Austin Retail vacancy remains near all-time lows

Austin Retail
As of October 2023, the overall vacancy rate in Austin’s retail market is 3.2%, up 10 basis points from 3.1% the previous year. Year-to-date, net absorption—move-ins minus move-outs—is at 1.6 million sq. ft., up 43% from the prior year-to date number of 1.1 million sq. ft. Build-to-suit retailer expansions within Austin’s suburban areas have fueled positive net absorption over the past year. The 177,900-sq. ft. department store (Target) at 1101 C-Bar Ranch Trail built in January, still reigns as the largest delivery completed in 2023 thus far. Year-to-date, deliveries registered at 1.8 million sq. ft.—roughly 83% of these deliveries are fully leased, further driving the availability rate down to 4.1%. In turn, the average asking rent increased 10% year-over-year to $26.39 per sq. ft.—a record high for the metro’s retail sector.

Austin Industrial
The overall vacancy rate in the Austin industrial market as of October 2023 is 8.7%, marking a 430-basis point increase from 4.4% in October 2022. Year-to-date, net absorption is at 3.5 million sq. ft., down from the prior year-to-date statistic of 11.2 million sq. ft. Construction reached 22.2 million sq. ft.—a record-high for the metro’s retail sector—increasing 61% from the previous year’s 13.7 million sq. ft. A notable project underway in October included a 1.5 million sq. ft. manufacturing building (Bobcat Project) at 13101 Harold Green Drive, which is set to be completed by March 2024. In addition, the metro’s average monthly rate currently stands at $1.15 per sq. ft., up 7% from the $1.07 per sq. ft. the previous year.

Austin Office
Ten months into 2023, the overall vacancy rate in the Austin office market is 18.1%, up 340 basis points from the prior year’s 14.7%. Year-to-date, net absorption -1.7 million sq. ft., down from the prior year-to-date tally of 1.6 million sq. ft. Tenants continue to reassess their office space needs through downsizing and decelerating corporate expansions, which has continued to temper demand throughout 2023. Year-to-date, leasing activity— comprised of new leases and renewals—is at 3.1 million sq. ft., 53% down from 6.8 million sq. ft. last year. The average asking rent currently stands at $41.43 per sq. ft., slightly up from $40.97 per sq. ft. in October 2022..

Austin Multifamily
Year-to-date, 8,660 multifamily units have been absorbed in Austin, up 10% from 7,872 units this time last year. Overall occupancy in the metro’s multifamily sector declined to 87.6% in October 2023, down 330 basis points from 90.9% in October 2022. Year-to-date, deliveries amounted to 21,255 units, up 47% from the prior year-to-date figure of 14,495 units. Notable completions within the last year include a 4-story, 450,000-sq.-ft. (463 units) apartment building at 3001 East Pecan Street in August 2023, and a 2-story, 550,000-sq.-ft. (409 units) apartment building at 18612 Pfluger Farm Lane in July 2023. The average monthly rate currently stands at $1,578 per unit, 4% down from $1,641 per unit last year.

Alex Babcock
Senior Research Analyst
[email protected]
tel 713 275 9618