By Britt Morrison, Senior Vice President, Weitzman Austin
At 96-97% occupied, the Austin retail market is still near record highs and among the highest occupied in country; however, some relief has finally arrived in the form of new development. For the past several years, we’ve seen a number of the national and regional concepts wanting to expand throughout the Austin metro area finding themselves with few to no options. Fortunately, 2016 has seen a flood of new construction both deliver and begin construction for delivery next year. However, as a testament to the current demand levels, the majority of the new developments are delivering space with occupancy already north of 90%. A few general examples:
o The delivery of Rock Rose/Domain Northside has been a success by almost all indicators and has truly solidified The Domain’s reputation as Austin’s “second downtown”.
o New construction and redevelopment of Downtown and Central Austin projects for retail and other uses, in projects such as Mueller, Plaza Saltillo and Northshore, have created new commercial opportunity for retailers as more Austin residents flock to true live-work-play areas like downtown.
For 2017, we’ll see some new market entrants, like 365 by Whole Foods Market and Field & Stream. Otherwise, tenants expanding in retail space will primarily be in the categories of food, dining, entertainment fitness, health and wellness, beauty and, to a lesser degree, medical/dental.
We do see some churn, especially in the restaurant market, which is as competitive as we’ve ever seen it. A concept may go dark but it’s not long before another one opens in its space.