TEXAS SNAPSHOT, APRIL 2010

Austin Retail Market

The Austin retail market is holding steady in the current economy due in no small part to positive media coverage. According to Sherry Sanchez of NAI Austin, numerous media organizations have placed the city near the top in many “best of” ranking lists. These honors have helped keep the retail market stable because job seekers from all over Texas have been coming to Austin.

“There’s a big huge flight of people moving to central Texas who don’t even have jobs yet,” she says. “We have job opportunities all over the map for people.” Companies in the city are also spurred on by stimulus money aimed at green energy projects. Finally, the stability of government jobs means a large number of Austinites are gainfully employed. But because no markets anywhere in the country are thriving, these factors mean that Austin is simply staying ahead of the glut.

“We’re not seeing attrition as rapidly as they are in a lot of parts of the country. Our service providers are hanging in there — some are expanding — and our restaurants are doing well,” Sanchez says.

Local and national tenants serving a working-class demographic base seem to be fairing the best. Check-cashing tenants, rent-to-own furniture stores and discount retail outfits have proven to be somewhat immune to the current hardships.

“If they are serving a lower demographic base, then they’re still standing,” she says. “You get into the groups that are a little more higher-end or maybe had expanded real rapidly before the downturn, those groups are the ones that are still holding tight.”

With uncertainty still pervading the retail market in Austin and only a few retailers making moves, landlords are still trying to retain clients. Though the area isn’t devoid of activity, Sanchez still predicts the market won’t return to a healthy state for quite a while.

“We are hearing reports that 2011 and 2012 will be good expansion years. Probably not so much for 2010,” Sanchez says. “There’s a few pockets of our market where we still need to add retailers; there’s still a little bit of lag behind from where the housing starts had taken over and the retail growth hadn’t kept up, but it’s not the norm, and I would say that we’re absorbing quite well right now with what we have.”

— Jon Ross

©2010 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 554-6054.