Still a developer's darling?

Austin slips 2 spots among country’s hottest commercial real estate markets

Austin slips 2 spots among hottest commercial real estate markets

Downtown Austin skyline
Despite the drop in ranking, Austin is still considered one of five "supernova" cities in the U.S. Nicholas McComber/Getty Images

Austin has lost a bit of its luster on an annual list of the country’s hottest commercial real estate markets.

The latest Emerging Trends in Real Estate report from professional services firm PwC and the nonprofit Urban Land Institute puts Austin at No. 4 among the U.S. commercial real estate markets to watch in 2022. Austin ranked second in last year’s report and first in the 2019 report. Since 2010, Austin has appeared at No. 7 or above in the closely watched Emerging Trends report.

The report, released October 14, bases its rankings on interviews with hundreds of commercial real estate professionals.

The report groups Austin with four other metro areas in a first-time category called “supernovas.” The four others are Nashville; Raleigh-Durham, North Carolina; Boise, Idaho; and Jacksonville, Florida.

“In astronomy, a supernova is the explosion of a star that creates unusual brilliance, but more generally the term refers to things that explode into prominence or popularity. So it is with the five metro areas in this new category,” according to the report.

“Austin has long been among the brightest stars in the constellation and a darling for investors and developers alike, first breaking into the [top 10] markets to watch in 2009,” the report adds.

Ahead of Austin in this year’s ranking are Nashville (No. 1), Raleigh-Durham (No. 2), and Phoenix (No. 3). Behind fourth-place Austin are:

  • Fifth-ranked Tampa-St. Petersburg, Florida.
  • Sixth-ranked Charlotte, North Carolina.
  • Seventh-ranked Dallas-Fort Worth.
  • Eighth-ranked Atlanta.
  • Ninth-ranked Seattle.
  • 10th-ranked Boston.

Elsewhere in Texas, San Antonio lands at No. 21 and Houston at No. 24 among 80 U.S. metro areas.

“An abundance of investable capital, low interest rates, and a continued demand for many product types has created a positive environment for our industry,” Byron Carlock, leader of the U.S. real estate practice at PwC, says in a news release. “However, not everything is rosy, and real estate still has its challenges ahead. There are rising costs, pending tax reform, and new infrastructure spending that could impact the labor market.”