Austin Market Report
Steady Inbound Population Migration and Business Move-Ins Support Long-Term Outlook; Investors Set Sights on Affluent Northern Suburbs
Tesla gigafactory could turn investors’ eyes to Southeast Austin. The electric car manufacturer is building a plant near Hornsby Bend that will employ 5,000 people upon completion in 2021. This should fuel household formation in the area, benefiting property owners. The retail segment in Southeast Austin has already responded to the news with vacancy tightening to 2.0 percent in September, down 120 basis points from the beginning of the year. Tesla’s move-in could draw additional employers to the area as well, where office vacancy is down 450 basis points over the trailing two years ended in the third quarter. Multifamily availability in the locale also rests below the market rate at 4.8 percent, which could fuel rent gains, particularly within the Class C segment, as the local workforces grow.