Austin, Texas, December 6, 2025
Austin’s retail market is showing signs of resilience with low vacancy rates and steady demand. However, new indicators reveal potential challenges for landlords as net absorption drops below 200,000 square feet for the first time in nearly three years. Asking rents have decreased slightly, and a substantial 2.65 million square feet of retail space is currently under construction. As the market dynamics shift, landlords must stay informed to navigate these emerging trends effectively.
Austin’s Retail Market: Landlords Face Emerging Challenges Amid Solid Performance
Austin, Texas – Austin’s retail market has demonstrated resilience, maintaining low vacancy rates and steady demand. However, recent indicators suggest potential challenges ahead for landlords.
Current Market Performance
As of the first quarter of 2025, the Austin retail market reported a vacancy rate of 3.3%, with net absorption totaling 99,310 square feet. This marks the first time in nearly three years that net absorption has fallen below 200,000 square feet, potentially signaling a cooling trend.
Emerging Concerns
The decline in net absorption, coupled with a slight decrease in asking rents averaging $26.26 per square foot, suggests that the market may be experiencing a shift. Additionally, the construction pipeline remains robust, with 2.65 million square feet of new retail space under construction, indicating ongoing supply expansion.
Market Dynamics and Future Outlook
While the Austin retail market has historically been characterized by strong demand and low vacancy rates, these recent developments highlight the need for landlords to monitor market trends closely. The interplay between supply expansion and demand will be crucial in determining the market’s trajectory in the coming months.
Background Context
Austin’s retail sector has experienced significant growth over the past two decades, with approximately 16.7 million square feet of multi-tenant space added since 2000, a 65% increase. This expansion has been driven by population growth and increased consumer spending.
Conclusion
While Austin’s retail market remains solid for landlords, emerging signs suggest the need for vigilance. Staying informed about market dynamics will be essential for landlords to navigate potential challenges effectively.
What is the current vacancy rate in Austin’s retail market?
The vacancy rate in Austin’s retail market is currently 3.3%.
How much new retail space is under construction in Austin?
There are 2.65 million square feet of new retail space under construction in Austin.
What has been the historical growth in Austin’s retail sector?
Since 2000, approximately 16.7 million square feet of multi-tenant space have been added to Austin’s retail sector, a 65% increase.
Key Features
| Feature | Details |
|---|---|
| Current Vacancy Rate | 3.3% |
| Net Absorption (Q1 2025) | 99,310 square feet |
| Asking Rents (Q1 2025) | $26.26 per square foot |
| New Retail Space Under Construction | 2.65 million square feet |
| Historical Growth (Since 2000) | 16.7 million square feet added, 65% increase |
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Author: STAFF HERE AUSTIN WRITER
The AUSTIN STAFF WRITER represents the experienced team at HEREAustinTX.com, your go-to source for actionable local news and information in Austin, Travis County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as SXSW, Austin City Limits Music Festival, Formula 1 United States Grand Prix, and the Austin Film Festival. Our coverage extends to key organizations like the Greater Austin Chamber of Commerce and Visit Austin, plus leading businesses in technology, automotive, and retail that power the local economy such as Dell Technologies, Tesla, and Apple. As part of the broader HERE network, including HERECollegeStation.com, HEREDallas.com, HEREHouston.com, and HERESanAntonio.com, we provide comprehensive, credible insights into Texas's dynamic landscape.
