AUSTIN | Project Updates Thread Part II

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The five hottest markets for retail commercial real estate - Austin #4

The five hottest retail commercial real estate markets in the U.S. share one characteristic – they are in the two most southern states of the continental U.S.

They also share other characteristics. They are seeing gains in retail that surpass national averages, driven by population growth, housing metrics and overall stronger economies, said Peter Muoio, chief economist at Ten-X, a leading online real estate marketplace.

Three of the top five “buy markets” in the retail sector are in Florida and two are in Texas. All five are characterized by low vacancies and strong demographics, according to Ten-X’s latest quarterly report on commercial real estate.

An entirely different story explains why Austin joins its sister Texas city in the top five. While it’s far away geographically from the Bay Area, Austin can be characterized as a hot tech market, Muoio said.

The city’s population is exploding, growing at more than triple the national rate, and paired with an unemployment rate of about 3.5 percent, the retail sector benefits from excellent demographics and a solid economic backdrop.

With decreasing vacancy rates and no significant supply risk, Austin is in a “sweet spot in terms of strong demand coming from population growth and income that’s being generated in the tech industry,” Muoio said.