Austin Retail Market Report

Net in-migration and rising job count augment demand for retail space. Vendors have continued to pursue space in Austin as the metro expands at an accelerated pace, fueled by recent company relocations. While recessionary fears have slowed the pace of hiring relative to last year, in 2023 Austin will still rank among the top six major U.S. markets for employment growth and volume of new residents. Net in-migration and a boosted local job count have lifted retail sales over the last two years, and by relation tenant demand for space. The 1.2 million-square-foot construction pipeline will place slight pressure on vacancy, but availability will remain below 4 percent for the second consecutive year. Over half of the pipeline was pre-leased as of December 2022, showing tenant willingness to pay a premium for new, well-located space. Large leases signed by retailers like Ashley HomeStore and Brookshire Brothers exhibit the effect of an expanding population on long-term demand for home decor and additional grocery store locations.