Austin Real Estate Blog

Despite the rise in office and apartment vacancies in the city of Austin, the retail sector is staying strong. About two and a half million square feet of retail space was added in the first half of 2008 and the occupancy rate rose slightly from 92 percent to 92.5 percent. This makes Austin number one in occupancy rate among the large Texas cities. San Antonio boasts an occupancy rate of 91 percent, while the Dallas/Fort Worth area checks in with an occupancy rate of 89.3 and Houston is at 88 percent.

The good retail news can be attributed to the influx of a throng of retail concerns – REI, Staples, Office Depot, among others – into the Austin area and filling the new space. Existing space, abandoned by big box stores such as Albertsons, is being subdivided and backfilled by a number of smaller stores.

The high occupancy rate can also be attributed to the fact that developers and construction companies have slowed new construction in response to the slower economy. Austin continues to grow in population and add jobs, though at a slower rate than previously. Experts predict a slow down in new construction in 2009.

Meanwhile, a few big projects are slated to open this year: Stone Hill Town Center in Pflugerville, Stone Creek Crossing in San Marcos, and Gateway in Leander. All these large developments are anchored by big box stores such as Home Depot, JC Penney, Best Buy, Target, Lowes and Kohls, with smaller stores filling in.