Austin Retail Market Report

Available retail space plunged to the lowest level in over a decade. Austin’s robust economic growth trends have fueled tenant demand for retail space across the metro, steadily compressing vacancy over the past few years. After briefly peaking at 4.8 percent following the onset of the pandemic in 2020, vacancy has dropped substantially to 3.0 percent in March of this year, the metro’s tightest rate going back to at least 2007. A relatively modest pace of construction has helped net absorption exceed new supply in six of the past eight quarters, resulting in a marketwide vacant stock total below 3 million square feet for the first time in more than a decade. This reduction in available retail space should continue to drive expanding tenants to existing floor plans and keep vacancy tight, despite emerging economic headwinds. At the end of this year, Austin is expected to maintain a vacancy rate that ranks among the 10 lowest for major U.S. metros and the tightest in the state of Texas.