Key Highlights
- Austin soared to the top of the residential markets just last year
- Now, Austin also considered #1 destination in US for potential commercial real estate investment
Austin Emerging from Pandemic as Hottest Commercial Market in Country
Mike McDonald, vice chairman with Cushman & Wakefield who represents pension funds, insurance companies and real estate trusts, declares Austin TX to be “…the hottest market in the country right now. Millennials are moving to the Sun Belt and companies are following Millennials. Investors are following the companies.”
Austin is now considered to be the #1 destination in the US for potential commercial real estate development, according to the CBRE Group, a national real estate services and investment firm. In CBRE’s latest investor survey, survey participants pointed to Austin’s resilience in its labor market and its outlook for steady growth.
Record Job Growth in Austin During 2020
A January 2021 report from the Austin Chamber of Commerce indicated that a record-setting 21,864 newjobs were due to either business expansions in and/or business relocations to Austin during 2020.
Austin is home to tech giants such as Samsung, IBM, Apple, Facebook and Dell. With such heavy-hitting tech stars already there, plus the state’s more than friendly tax environment, it’s no wonder that Elon Musk recently decided to relocate himself and Tesla to the neighborhood. And, it’s also no wonder that Austin’s Chamber of Commerce promotes the state capital of Texas as “Silicon Hills,” referring to its location in the Hill Country of Texas amid all those tech glitterati.
Office Vacancy Rates in Austin Nearly Negligible
While nationwide office vacancy rates rose to 17.1% by the end of 2020, according to a report released by JLL, Austin came in with net office vacancy losses of 1%.
How Has Austin Sustained its Counterintuitive Economic Performance in the Midst of a Pandemic?
Experts believe a combination of factors has kept Austin’s nose well above water while other metros have been devastated by the pandemic. These factors include “stature as an education center and tech hub, a business friendly climate, an abundance of social attractions (such as South by Southwest)and charming eccentricity…” that spawned the slogan “Keep Austin Weird.”
Flood of Job Seekers to Austin Bringing Influx of Out-of-State Investment Capital to State Capital City
William C. Jenkins, an Austin developer and principal with Stonelake Capital Partners, believes that in-migrating companies and in-migrating job seekers reinforce the thinking of institutional investors who are looking for “new cutting-edge, best-of-market real estate in Austin and in Texas.”
William D. Redd, an executive vice president and senior managing director with Brandywine Realty Trust, agrees. Redd said, “People believe long term that Austin is on a roll and continues to be. If you’re a big investment firm, you want a piece of that action.”
Thanks to The New York Times.
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