Marcus & Millichap has published its 2Q 2024 Austin Retail market investment report, and it finds Austin among the top 10 least vacant major U.S. markets for both multi- and single-tenant retail.
The single-tenant vacancy rate is below 3 percent, according to the report, with some submarkets, including northeast and South Austin, showing even tighter conditions. Driven by limited availability, single-tenant rents in Austin have surged, with annual growth rates exceeding 20 percent in those two neighborhoods, but the trend also extends to suburbs such as Cedar Park and Round Rock.
Despite a slight increase in vacancy, the multitenant retail sector remains robust. A 0.2 percent year-over-year decline in average asking rents suggests that competitive pricing is helping to attract new tenants, including traditionally single-tenant businesses.
While construction volume for 2024 is slightly lower than in the previous year, it remains robust. Major projects such as the new South Austin H-E-B contribute to a positive outlook, with new space over 60 percent preleased as of June 2024.
“Austin’s retail market continues to outperform many major metros, characterized by a tight vacancy environment and robust rent growth, particularly in the multi-tenant sector,” the Austin Marcus & Millichap’s office’s Coleman Solomon said. "COVID served as a litmus test for retail, especially for big-box and junior-box concepts, which many had questioned before the pandemic. However, people grew tired of relying solely on Amazon, DoorDash, and other delivery services for their retail needs. After COVID, a shift occurred—occupancy levels reached historic highs, and year-over-year rent growth became some of the strongest we’ve ever seen."
