Unless you’ve been living way off the grid the past couple of years, you’re fully aware that Austin ranks among the hottest residential real estate markets in the U.S. What you may not realize, though, is that it’s also among the country’s hottest commercial real estate markets.
In a recently released report, the National Association of Realtors identifies Austin as one of the top 10 commercial real estate markets in the U.S. San Antonio is the only other Texas market to appear on the unranked list.
Austin’s commercial real estate sector has benefited from an influx of companies, particularly in the tech industry, that are moving out of California. Among the relocating businesses are Cangshan Cutlery, F45 Training, Green Dot, and Markaaz.
Factors in Austin’s favor that the report outlines include:
- Office occupancy has grown, rather than shrunk, in the past 12 months. Across the country, the COVID-19 pandemic has hammered the office sector, with millions of Americans telecommuting rather than heading to a workplace.
- In the multifamily segment (part of the commercial real estate sector), Austin enjoys one of the most robust levels of construction activity in the country.
- Advertised rents at multifamily properties are up 21.2 percent on a year-over-year basis.
“Even as the economy makes a steady recovery, the one sector still lagging behind has been the office market,” Lawrence Yun, chief economist at the National Association of Realtors, says in a news release. “Work-from-home flexibility looks to be the defining shift of the new post-pandemic economy.”
“Despite the overall challenges, however, some local markets are bucking the trend with more office occupancy and rising rents. A combination of strong in-migration and relatively lower cost of doing business is driving these growth markets,” Yun adds.