Austin’s retail market demonstrates its strength with record-breaking asking rents.
Vacancy rate at 3.4%
Eight months into 2022, the overall vacancy in the Austin retail market is at a tight 3.4%, dropping 60 basis points from last year’s 4.0%. Availability is 4.7%, down 90 basis points from August 2021 at 5.6%. The difference between this figure and the vacancy rate reflects expected future move-outs. Leasing activity comprised of new leases and renewals decreased year-over-year at 1.5 million sq. ft. versus 1.8 million sq. ft., while net absorption (move-ins minus move-outs) is at 765,000 sq. ft., down 32% year-over-year from 1.1 million sq. ft. The top transaction so far in 2022 is Cowboys Fit signing a lease for 45,095 sq. ft. in Stone Hill Town Center in Pflugerville.
Average retail NNN asking rents at an all-time high
Overall positive trends in leasing activity have driven average retail asking rents higher. The Austin metro NNN average asking rent is at an all-time high of $23.23 per sq. ft., up 10% from $21.19 last year. Despite the pandemic, Austin’s retail market has remained resilient, which may suggest Austin landlords have weathered this storm better than other markets.
Retail and rooftops
According to the Austin Board of Realtors, the Austin-Round Rock MSA housing market continued to trend towards more normal and sustainable levels in July. Median price grew by only 8% year over year to $515,000, a record for the month of July, but the first-time home price growth has been in the single digits since June 2020. The region’s housing inventory reached 2.7 months—the highest inventory level since November 2018. In July, residential home sales declined 28.3% year over year, sales dollar volume declined 21.9.%, and new listings remained consistent with a 0.2% decline to 5,142 listings. Homes spent an average of 22 days on the market, 10 days more than July 2021.
Director of Research
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