Austin retail 96% booked; restaurants including Kerbey Lane on way

Jul 30, 2014
Austin Business Journal

Austin’s retail real estate market is growing tighter as population increases, but retail development remains spare


Market-wide occupancy rate is 95.6 percent, the highest since late 2004


The mid-year report indicates a critically low supply of Class A retail space, though about 30 small retail strip centers are opening or underway


New supply is located in more suburban or outlying spots such as Bastrop, San Marcos, Cedar Park and Round Rock


A few larger projects have debuted in the past six months, but they are largely big-box stores in Cedar Park, Elgin and Manor. A Walmart in Kyle will open later this year or in early 2015. Sam’s Club, the wholesale division of Walmart, will open a new store near Lakeline Mall in the far northwest Austin submarket this fall


In that same area, Cedar Park Town Center is expanding around its anchor tenant, Costco Wholesale Corp


Rental rates are increasing as a result of the constricted marketplace. Now, Class A spaces command $30 per square foot or more. The best locations are netting $40 per square foot. Class B properties, which are still in a good location and fairly well maintained, are commanding 5 percent average increases to between $18 and $25 per square foot. Class C properties, which are of average quality and location, are generating rents of $14 to $18 per square feet


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