Austin, TX Economic Overview
As the capital of Texas and the fastest growing city in the U.S., Austin is home to nearly 2 million people. Austinites are a diverse, some might say quirky, mix of students, musicians, blue collar workers, government employees, high-tech entrepreneurs, and is home to a lively LGBT community. Over the years, Austin has emerged as a booming center for high-technology and business, with companies such as Amazon, Apple, eBay and Google having a major corporate presence in the city. Nicknamed 'Silicon Hills', the commercial real estate market in Austin is driven by a perfect blend of high-tech, pharmaceutical and biotechnology companies along with plenty of private capital investment and government enterprise.
U.S. News has ranked Austin as the #1 place to live in the country and Forbes Magazine has ranked the city as the 14th best place for business and careers. The most recent GDP for the Austin metropolitan statistical area came in at $86 billion, driven in large part by the region's booming growth, major center for high-tech, and the consistent stream of highly-educated engineering and computer science graduates that the University of Texas at Austin funnels into the economy of Austin each year.
Business and industry is as diverse as its residents are, with a near perfect combination of high-technology companies, government employment, biotechnology, life science, manufacturing, defense, business and finance. Venture capital likes what it sees in Austin, and the city is one of the top recipients of these investments in the country.
Austin, TX Commercial Real Estate Market
With nearly 50 million square feet of office inventory in Austin, and almost 3 million square feet in the pipeline as of mid-2017, investors in the office market in Austin continue to be bullish on this asset class. The Central Business District continues to be the #1 location for tenant demand driven by the needs of the professional and business service sectors, while the submarkets of North/Domain and Central East Austin offer tenants slightly more attractive rental rates.
The industrial market in Austin continues to hold its own, with projected vacancy, net absorption, new construction hitting the market, and product in the pipeline all pointing in the right direction. The East and Southeast Austin submarkets account for most the industrial commercial real estate in Austin, allowing for the development of both new industrial and flex product. Elsewhere in Austin industrial product may be in short supply as older, existing properties are turned into mixed-use and creative office space.
The strong economy, population and job growth help to explain the record high 96.2% occupancy rate for the commercial retail real estate sector in Austin. With over 48 million square feet of inventory in the market and a job growth of over 3.5% last year, the tenant demand for retail space in Austin is projected to continue hitting record levels. Recent major retail leasing activity includes new space absorbed by Nordstrom, Randalls, H-E-B, Dick's Sporting Goods and Walmart.
This year Austin was ranked by the Urban Land Institute as the #1 City for Real Estate Investment and Development, another sign that both national and international capital will continue to find Austin a rewarding market in which to develop and invest.
Austin, TX Office Sales Volume
Data provided by Yardi Matrix, for properties larger than 50K SF, which sold at over $5M.
Austin, TX Office Transactions
Data provided by Yardi Matrix, for properties larger than 50K SF, which sold at over $5M.
Austin, TX Commercial Inventory Breakdown
Total: 81,106,831 SF
By square footage range:
- 50k to 100k SF: 13,580,014 SF / 16.74% of total office
- 100k to 500k SF: 56,260,354 SF / 69.37% of total office
- 500k to 1M SF: 8,850,325 SF / 10.91% of total office
- > 1M SF: 2,416,138 SF / 2.98% of total office
- Class A+: 3,155,978 SF / 3.89% of total office
- Class A: 41,104,195 SF / 50.68% of total office
- Class B: 27,891,190 SF / 34.39% of total office
- Class C: 1,255,627 SF / 1.55% of total office
Employment in Austin, TX
Attracted by the Austin job market's low employment rate of barely 3%, job growth of 6%, a population growth of over 3%, an affordable cost of living and a lifestyle that many consider second to none, employers have no trouble finding well-educated, highly-qualified people.
Corporate headquarters from around the country come to Austin for its skilled, multi-tiered workforce and the strong regional infrastructure. Key industries in Austin include: Advanced Manufacturing, Creative & Digital Media Technology, Life Sciences, Clean Energy & Power Technology, Data Management, and Space Technology. There are over 74,000 people employed in professional, scientific and technical jobs; over 86,000 in health care and social assistance, and nearly 42,000 in wholesale trade.
Major employers in Austin include the City of Austin, Austin Independent School District, Dell, the U.S. Federal Government, NXP Semiconductors, IBM, St. David's Healthcare Partnership, the State of Texas, Texas State University, and the University of Texas at Austin.
Education in Austin, TX
Austin was recently ranked by Central Connecticut State University as the 16th most literate city in the U.S., with over 43% of Austin residents holding a bachelor's degree and 16% holding an advanced degree. The University of Texas at Austin graduates thousands of engineering and computer science students each year to satisfy the demand of the business community.
The University of Texas at Austin has over 38,000 undergrads and 12,000 graduate students enrolled and was recently ranked as the 17th best public university in the country by U.S. News & World Report. The University has the highest-ranked engineering, business and law programs in the entire State of Texas and has annual research expenditures of nearly $600 million.
Other colleges and universities in the Austin area include Austin Community College, the Austin campus of Virginia College, The Art Institute of Austin, St. Edward's University and Concordia University.
Austin has an extensive network of both public and private primary and secondary education schools. There are 29 public school districts, 17 charter schools and 69 private schools. The Eanes and Round Rock public schools districts are both rated by Expansion Management magazine as 'gold medal' school districts.
Commuting Time in Austin, TX
While Austin ranks #1 as the fastest growing city in the U.S. and the #1 best place to live, it unfortunately also ranks #1 as the city where work-week commuters spend the most time sitting in their cars, not moving.
While the majority of Austinites commute by car, its transportation infrastructure offers plenty of alternatives:
- The I-35, Mopac Expressway, U.S. Highway 183 and State Highway 71 all pass through Austin;
- Mass transit in Austin is operated by Capital Metro which provides bus service, and is continuing to develop light rail service to connect Downtown, East Austin, North Central Austin and Northwest Austin, with future extensions to link Downtown with the University of Texas at Austin and the airport;
- Cycling is used by over 2% of commuters to pedal to and from work each day, and that number is consistently growing. Austin is known as the most bicycle-friendly city in Texas and was recently ranked by Bicycling Magazine as #7 in the country;
- Austin-Bergstrom International Airport is located just five miles southeast of Austin and provides air service for the metro area.
- Total Population916,906
- Male Population(50.6 %) 463,869
- Female Population(49.4 %) 453,037
- Median Age32.70
- Average Household Income$91,811
- Median Household Income$63,717
- Median Income Under 25$27,321
- Median Income 25-44$65,661
- Median Income 45-64$75,663
- Median Income Over 65$53,690
- Anderson Mill - Jollyville Demographics
- Angus Valley Demographics
- Avery Ranch Demographics
- Balcones Woods Demographics
- Barton Hills Demographics
- Bee Cave Woods Demographics
- Colorado Crossing Demographics
- Downtown Austin Demographics
- East Cesar Chavez Demographics
- East Riverside - Oltorf Demographics
- Great Hills Demographics
- Harris Ridge Demographics
- Highland Demographics
- Jester Estates Demographics
- Long Canyon Demographics
- McKinney Demographics
- Milwood Demographics
- Mueller Demographics
- North Burnet Demographics
- North Shoal Creek Demographics
- Northwest Hills Demographics
- Oak Hill Demographics
- Promontory Point Demographics
- River Oaks Demographics
- Rob Roy Demographics
- South Congress Demographics
- St Johns Demographics
- Westlake Demographics
Residential Rents in Austin, TX
When choosing the best place for a business, location research is very important – not only for the office, but also for the employees’ convenience.
Despite the popularity of Austin for both residents and business, apartment rents in Austin have remained relatively stable over the past couple of years, thanks to new product coming onto the market and the expansive nature of the Austin metro area. Rents for a studio unit run just under $1,000 per month, while one-bedrooms run just under $1,100 monthly and three-bedroom units are nearing the $1,800 mark per month.
The top three most expensive neighborhoods to rent in are Downtown Austin, Travis Heights (South River City) and Bouldin Creek, while the three least expensive are Franklin Park, Coronado Hills and Windsor Hills.
Austin, TX Average Rental Price, May 2019
- $ 1,303/mo
- Studio: $ 1,034
- 1 Bedroom: $ 1,139
- 2 Bedrooms: $ 1,437
Austin, TX Rent Trends
Over its 180-year history, Austin has grown from a settlement of fewer than 1,000 people to one of the country’s most vibrant metros. Check out the timeline-mapped rise of Downtown Austin’s skyward buildings, starting with the Texas State Capitol building.
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