Austin Retail Space- Understanding the Austin Retail Space Market
Finding your place in the Austin retail space can be a big decision. If that decision is powered by a good understanding of the overall Austin marketplace coupled with experts in the retail market, you can find your retail business in the optimal available space. With over 75 million square feet of retail space in Austin, the marketplace can seem overwhelming, but a general overview can help business owners gain an in-depth, inside look at the best of best available retail space.
Austin retail space covers an expansive amount of area. It includes: Cedar Park, Round Rock, Bastrop County and Caldwell County. Retail space is comprised of a variety of business models which include general retail, shopping malls and centers, power centers and specialty centers. The 2010 third quarter ended with a slight decline in activity as vacancy dipped by 0.2% to 6.6%. This is in line with the current national trends. Two retail spaces were also added to the third quarter, offering a total of just over 8,100 SF of new retail space to be absorbed, while a significant 201,243 SF of new retail space remained under construction.
In the 2010 Austin retail space market, several significant anchor tenants vacated large retail spaces. More than 320,000 SF of retail space at the Boardwalk Shopping center was vacated by two national tenants: Wal-Mart and Home Depot. With two of the three 2010 quarters experiencing a negative absorption, the appearance of the large-space tenants Bed, Bath & Beyond, New Flower Farmers Market, and Sam Moon showed promising absorption of over 100,000 SF of retail space.
The Austin retail space over the last four quarters has experienced a slight decline and dipped from 6.7% to 6.6%. As vacancy rates generally range from 5-10% nationally, Austin’s vacancy rate is comparable with the nation and is showing signs of recovery. In fact, there were three large, durable leases signed in 2010. These included American Campus Communities, Bed, Bath & Beyond, and Best Buy. Long-term leases like these are confident signs of a market upswing. Still, rents remain reasonable and stable at an average rate for all retail sectors of $18.88 per square foot. Overall, this is an opportune time to move into a retail space as a new tenant. More than 250,000 square feet of retail space has been added to the market over the last four quarters. Further, cap rates are generally higher now, with an average of 7.9%, compared with cap rates of 7.25% just a year ago.
