Austin Gets Buy Sign for Retail Assets

Muoio says the robust economy is a key driver of the strength of the retail market.

AUSTIN, TX—According to the US retail market outlook released by Ten-X, the long-term forecast for the top five buy and sell markets for retail real estate assets include all but one coastal city. The winner in the buy category with an inland location is no surprise: Austin, TX.

Austin’s economy is hot, as a population explosion fuels a high 3% employment growth rate, says Ten-X. Demand for retail space is strong, and although vacancies fell only 10 bps from one year ago–to 6.5%–Ten-X predicts vacancies will drop below 6% by 2019. Healthy rent gains also signal high net operating income growth, which is projected to average in the low 5% range through 2018, after which it is expected to decelerate to around 2%.