Austin Retail Market Report
Grocery, Auto Parts Head Leasing as Economic Drivers Magnify Consumption
Vacancy entered 2022 at a decade-minimum, will go even lower. Retail headwinds from the health crisis have largely dissipated, and the metro's ability to grow its employment count and population tally during the pandemic put Austin in a strong position. Across 2020 and 2021, the market added more than 80,000 new residents, a growth pace that ranks as the fastest among all major U.S. metros during that span. This expedited consumer base expansion amplifies spending on goods and services, luring new retailers and encouraging local businesses to expand. Robust leasing momentum is the result. Net absorption exceeded completions by nearly 1 million square feet in 2021 — the largest disparity between the two metrics in at least 15 years. Demand is expected to remain heightened in 2022 while construction stays mild, setting the stage for vacancy to undercut the already tight rate of 3.8 percent in the first quarter.