Author: Beck-Reit Commercial Real Estate This post originally appeared on Austin Commercial Real Estate Insight and is republished with permission. Find out how to blog with us on theBrokerList. Low Vacany in Retail and High Demand.jpg?format=1500w

Low Retail Vacancy & High Demand… Welcome to Austin! 

Times are surely changing and there’s no place like Austin for retail. Driving across America, you may likely find some vacant retail strips or ghost towns with empty stores but definitely not in Austin! Austin is just the opposite of a typical US city with a surprisingly lower retail vacancy since 2020.

The eclectic landscape here in Austin is quite unique and has evolved in many ways to create a thriving mix of possibilities for new businesses. However, longtime retailers have surely felt the squeeze and pressure with this major urban transformation, but for a lot of them who stayed open… increased rents have also meant increased sales. 

The capitol of Texas now has the lowest retail vacancy rate for any city in the state and is also one of the lowest in the country. 

“Retail Availability can simply not keep up with Austin’s Booming Population. The infrastructure here is not the same as Dallas or Houston” says DeLea Becker, founder of Beck-Reit Commercial Brokerage. 

In many US cities, populations are shifting fast. Demographics are changing and populations are adapting accordingly. State governments are responding in very different ways to a post-covid world.  The people are responding with their dollars, decisions, and spending power. Many move to places with better quality of life, nice weather, and better job markets.  Texas, and specifically Austin make the top of the list of where people are moving.


  • Between 2010 and 2020, Austin’s population grew by approximately 28%, from around 790,000 to 1.03 million residents.

  • During the same period, retail inventory increased by approximately 23%, from around 36.3 million square feet to 44.5 million square feet

  • This suggests that retail inventory has not kept pace with population growth in Austin.


  • Between 2010 and 2020, Dallas’ population grew by approximately 9%, from around 1.19 million to 1.3 million residents.

  • During the same period, retail inventory increased by approximately 13%, from around 173.5 million square feet to 196.5 million square feet.

  • This suggests that retail inventory has grown slightly faster than population in Dallas.


  • Between 2010 and 2020, Houston’s population grew by approximately 12%, from around 2.1 million to 2.3 million residents.

  • During the same period, retail inventory increased by approximately 14%, from around 221.7 million square feet to 252.8 million square feet.

  • This suggests that retail inventory has grown slightly faster than population in Houston.

So does a low retail vacancy rate actually help keep Austin weird? Well, compared to these other cities above, the amount of retail development possible here is surely less . So this creates a unique situation as far as infrastructure goes. How Austin will adapt and respond to these known challenges will determine the brightness of the economy’s future… and the fastest growing city in America will surely find a way. 

More competition for retail space is an interesting concept with Pros and Cons to it. For example, it can often mean more creativity and efficiency per square foot of real estate. 

“For retailers in a place like Manhattan, for example… many get very creative with their stores given the high price per square foot.  On the other hand, raising rents could simply push some businesses over the edge… but in this Austin market, there will be someone likely knocking at the door to lease available space.”

-Alexander Hill, Retail Leasing Broker 

Retail rents have surely increased along with the population while available space can simply not keep up. Shops are busier than ever, people are out and about… and many retailers still have lines around the block! 

Low Vacancy can be a good thing for retail in many ways. When a city has limited space available, the bar for quality gets raised. Retailers will feel the increase in rent in desirable areas and the possibility of developing too much space too soon is has not been a problem in Austin for decades due to the difficulty of the Austin Development Code and City Development Department

However, could the limitations of Austin’s development be holding it back in some ways? 

There’s No Doubt Austin is in demand! After a massive SXSW festival, here are some the Pro’s and Con’s of low retail vacancy. On the surface, the economy of Austin definitely appears to be thriving.  This looks good for a city, no doubt about it. However, what does one of the lowest vacancies in a city actually mean for the future of retail? 

Population growth is obviously booming here, with a nearly 30% increase in population in the last decade! 

Austin is known for its vibrant and diverse retail scene, with a mix of local and national retailers offering everything from high-end fashion to artisanal foods. The city has several popular retail destinations, including the Domain, a mixed-use development that features upscale shopping, dining, and entertainment options, as well as the Barton Creek Square Mall, which is home to over 180 stores.  Several areas of the city have streets with retailers lining both sides and drawing customers from across the US and the world =  South Congress, 2nd Street Downtown, Burnet Road in North Austin. But this can pose challenges. Retail space in Austin can be difficult to come by, particularly in desirable areas, and rents can be higher than in other markets. This can make it more difficult for small businesses to compete and can limit the options available to larger businesses.

In recent years, Austin has also seen a growing trend towards mixed-use developments, which combine residential, commercial, and retail space in a single location. These developments, such as the Grove at Shoal Creek and Mueller, offer a convenient and walkable shopping experience for residents and visitors alike.

What makes Austin so unique as a city? 

History and Culture play a major role in the city’s development. Some would say the art and music scene here in Austin is world-class and surely offers a wide variety of entertainment, festivals, and places where people can simply be people and have a great time. 

Perhaps its the trendiness … the tech companies. So Why is Austin’s Retail Market One-Of-A-Kind? Austin has a low retail vacancy which creates lots of demand and competition for good space. When a city’s population grows as fast as Austin, there is naturally increased demand for goods and services, especially retail.  As such, retail inventory needs to keep pace with population growth to ensure that residents have access to the products and services they need. If retail inventory does not keep pace with population growth, it can lead to supply shortages, increased competition for existing retail space, and potentially higher prices for consumers.  Austin has become a Hot Spot for travel, vacations, business conferences and ranks in top 5 for Bachelorette trips.  Demand for retail is not reliant on the residents of Austin alone.

On the other hand, if retail inventory grows faster than population, it can lead to oversupply and potential vacancies, which can negatively impact the local economy by reducing the value of the commercial real estate and limiting job opportunities for retail workers.

Overall, the relationship between retail inventory and population growth can provide important insights into the health of a city’s economy and can help policymakers and business leaders make informed decisions about retail development and investment.

The relationship between retail inventory and population growth in a city can provide insight into the state of its economy.

Retail inventory refers to the amount of retail space available in a given area, which can include shopping centers, malls, and other retail developments. Population growth, on the other hand, refers to the increase in the number of people living in a particular area.

Opening another store? Austin has more people, cool trends, out-of-town and out-of-state visitors, and millennial spending power… yet it has much less retail inventory than other metro areas of Texas.

When it comes to commercial real estate in Texas, Austin and Dallas are two of the most attractive markets. Both cities offer a thriving business environment, a growing population, and a high quality of life. However, there are some key differences between the two cities that investors and businesses should be aware of when considering retail commercial real estate opportunities.

Austin is known for its eclectic and unique shopping scene. The city is home to a number of independent boutiques, vintage stores, and artisan markets that offer a one-of-a-kind shopping experience. South Congress Avenue, in particular, is a popular destination for shoppers looking for vintage clothing, handmade jewelry, and quirky home decor.

In addition to the independent shops, Austin has a number of retail centers and shopping malls, such as The Domain and Barton Creek Square, which offer a mix of high-end and affordable options. However, unlike Houston, Austin’s retail scene is characterized by its local and independent businesses, which add to the city’s quirky and vibrant atmosphere.

One major difference between Austin and Dallas is their population growth rates. Austin has been experiencing rapid population growth for several years, thanks in part to its reputation as a tech hub and its appeal to younger professionals. According to the U.S. Census Bureau, the Austin metropolitan area grew by 25.6% between 2010 and 2020. By contrast, the Dallas-Fort Worth-Arlington metro area grew by 15.7% over the same period.

This population growth, festivals, SXSW, F1, ACL  have had a significant impact on the retail commercial real estate market in Austin. The city has seen a boom in new retail development, particularly in the downtown area and in neighborhoods like South Congress and East Austin. This has created opportunities for investors and businesses looking to establish a presence in a growing market.

Dallas, on the other hand, has a larger and more established retail market. The city has a longer history of development and has more available retail space than Austin. This can make it easier for businesses to find the right space at the right price, particularly in areas like North Dallas and Plano that have seen significant growth in recent years.  However, Dallas’ larger market can also make it more competitive. Businesses may find it more difficult to stand out in a crowded market, particularly in areas like the Dallas Galleria that have a high concentration of retail space.

Another key difference between the two cities is their approach to zoning and development. Austin has a reputation for being more restrictive in its zoning laws, which can make it more difficult for developers to build new retail spaces. This has led to a focus on the adaptive reuse of existing buildings, which can create unique and interesting retail spaces but can also limit the availability of new development opportunities.

Dallas, by contrast, has a more permissive approach to zoning and development. This has led to a greater number of new retail developments in recent years, particularly in areas like Frisco and The Colony that have seen significant population growth. However, this approach can also lead to more generic and cookie-cutter developments that may not be as attractive to businesses or consumers.

Ultimately, both Austin and Dallas offer unique opportunities for investors and businesses looking to establish a presence in Texas’ thriving retail commercial real estate market. The key is to understand the differences between the two markets and to identify the right opportunities based on your needs and goals. Whether you’re looking for a dynamic and growing market in Austin or a larger and more established market in Dallas, there are plenty of options available to suit your needs here in Texas.

Austin’s infrastructure can limit the availability for real estate development, specifically retail, in several ways:

  1. Limited Road Capacity: Austin’s infrastructure has not kept pace with its rapid growth, resulting in limited road capacity, which can make it difficult for retail businesses to attract customers. Traffic congestion can also discourage people from visiting certain areas, which can limit the number of potential customers for retail businesses.

  2. Limited Public Transportation: Austin’s public transportation system is limited, which can make it difficult for people without cars to access retail locations. This can limit the potential customer base for retail businesses, especially those located outside of the city center.

  3. Zoning Restrictions: Austin’s zoning regulations can limit the types of retail businesses that can be developed in certain areas. For example, some areas may be zoned exclusively for residential use, which would prohibit the development of retail businesses. This can limit the availability of retail spaces in certain areas of the city.

  4. Limited Available Land: Austin’s rapid growth has resulted in limited available land for real estate development, which can make it difficult to find suitable locations for retail businesses. This can result in higher real estate prices and limited availability of retail spaces.

  5. Environmental Restrictions: Austin has strict environmental regulations that can limit the types of developments that can be built in certain areas. For example, developments located near protected wetlands may be prohibited, which can limit the available land for real estate development.


While both Houston and Austin offer a diverse range of shopping experiences, they differ in their overall vibe and atmosphere. Houston’s retail scene is more focused on luxury and high-end shopping, with a number of upscale department stores and shopping centers. In contrast, Austin’s retail scene is more laid-back and centered around local and independent businesses.

Another key difference is the size and scale of the retail options in each city. Houston’s shopping malls and centers are some of the largest in the country, offering a huge selection of brands and options for shoppers. In contrast, Austin’s retail centers are more compact and focused on a smaller, more curated selection of stores.

Finally, it’s worth noting that while Houston may have more options for high-end shopping, Austin’s independent businesses and artisan markets offer a unique and authentic shopping experience that can’t be found elsewhere.

Want to Lease Retail Space in Austin?  Get ready to be competitive and work with an experienced Commercial Brokerage that has experience and connections with Owners/Landlords in Austin.  Beck-Reit is always leasing our own buildings and the buildings we manage for our clients.  Many of our transactions occur before the property goes on the Market.  We always give our clients advanced warning of locations coming up for lease or for sale.  Same for any Landlords with Vacatn Space or ready to sell their commercial buildings.  We have a list of our clients ready – just waiting for us to send them the perfect location.

We are here to assist you Grow Business and Build Wealth.

Alexander Hill

Beck-Reit Commercial Real Estate 


[email protected]