Marcus & Millichap: Austin retail tenant demand strong in third quarter

​​​​​​AUSTIN – Positive net migration continues to boost household formation and lift retail spending in Austin, encouraging retailer expansion, says Marcus & Millichap in its third-quarter market report.

Cedar Park has attracted a number of new retail developments since 2009 as residents flock to this area and single-family and multifamily projects rise, according to the report.

"National credit tenants such as Whole Foods, Buy Buy Baby, and World Market have opened stores in the recently completed The Parke shopping center," the report said. "Other large retail projects coming online this year are mostly preleased, and several new entertainment options are opening throughout the metro. Despite healthy absorption trends, supply additions will outstrip demand for the first time in eight years during 2017, pushing up the overall vacancy rate."​

Marcus & Millichap’s local retail projections for the remainder of the year:

• Developers will ramp up deliveries this year (1.6 million sf) after bringing nearly 1.1 million sf of retail space online during 2016.
• Deliveries will outpace absorption this year, pushing up vacancy to 3.5 percent. This marks the first annual increase since 2009.
• Tight vacancy will prompt asking rents to increase 4.3 percent.