Austin Retail Investment Forecast
Single-Tenant Firing on All Cylinders Amid Economic Headway, Multi-Tenant to Play Catch-up in 2022
Multitude of tailwinds signal fruitful outlook. Building off a resilient economic performance in which the metro job total surpassed the pre-pandemic peak by August of last year, Austin is positioned to sustain momentum in 2022. The leisure and hospitality headcount is approaching the 2019 measure, with the swift pace of population growth helping businesses find workers. Meanwhile, new tech and financial firms are entering the metro, creating higher-wage positions and boosting spending. By year-end, the median household income in Austin is expected to exceed $87,000, a 10-plus percent premium over all three other major Texas markets. Many retailers are cognizant of these positive trends and are seeking space across the metro, with a particular preference for floorplans in fast-growing south and east suburbs. The retail landscape is uneven, with single-tenant vacancy falling below the 4 percent threshold for the first time since 2018, while multi-tenant availability remains 100 basis points above the pre-health crisis level. The variance in demand is impacting asking rates, as single-tenant rent has been climbing at a pace twice as fast as the trailing five-year average, while the mean multi-tenant rent has weakened.