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The commercial and industrial real estate market in the Austin area experienced record demand over the last few years. The boom has spurred massive development, and the area remains one of the most competitive business markets in the country.

Austin Commercial Real Estate: Economic Drivers

Our fair city of Austin, Texas is known for its cool vibe and friendly atmosphere. A highly livable place for all ages, the capital city attracts people from across the state and country. The steady migration has helped to make Austin recession-resistant and keeps the local economy strong.

The healthy business culture is fueled in part by Austin’s role as a regional education hub, with the city hosting 400,000 college and university students each year. That’s in addition to the thriving tech and music industries, which attract skilled workers.

These combined factors continue to draw new business, and investors have Austin commercial and industrial properties at the top of their list!

Austin Still High on Many Lists

Austin was named second-best performing large city in America in 2016. In the same year, the Austin economy gained around 50,000 jobs. In 2017 Austin gained fewer jobs but still experienced healthy growth, and was ranked as the country’s 12th fastest-growing major metro. Austin’s unemployment rate in 2017 stayed well below the state and U.S. levels, with rents still climbing and a stable demand for property.

Over 2 million square feet of office space was under construction during Q1 of 2017. Not surprisingly, central location and good parking options are the top demands. Austin’s industrial leasing activity was just under half a million square feet in Q2 2017. The majority of second quarter leases were in the North submarket. The South Submarket also experienced large gains.

Looking to 2018 in the Austin Commercial Market

According to PWC’s 39th annual Emerging Trends in Real Estate Report, Austin ranked second in the country’s real estate markets, after Seattle. Austin and Dallas both made the Top 10. The report also predicts slower but more sustainable growth for the U.S. real estate market.

In 2018, Austin commercial property is poised to remain a hot market-commodity. Curbed ranked Austin as #2 in the Top U.S. Markets to Watch in 2018 (again behind Seattle).

Take Advantage of Market Trends

Job growth and occupancy rates were somewhat lower in 2017 when compared with the previous year. However, Austin remains a healthy market.  Vacancies increased slightly in Austin’s late 2017 commercial real estate market. This change benefits commercial and industrial tenants. When vacancies rise, landlords may lower rent slightly in order to fill excess spaces quickly.

Despite higher vacancy, the long-term outlook for the industrial market is good. Healthy economic conditions, steady business expansion, and popularity make Austin a top market for investors. The city is in high demand for all kinds of commercial spaces: retail, warehouse, office and flex space.

As a commercial or industrial renter in Austin, you can feel confident that your business can continue to grow, while possibly benefitting from lower rents or other concessions from your landlord.

We are very optimistic and excited for 2018. How about you? What real estate plans do you have for the coming year? Let us know!

Looking for Austin-area commercial real estate expertise?


Contact Chris Oddo

Tel: 512.736.5933