CBRE: Austin retailers flock to new product

• As a result of big box closures, absorption levels are lower than 2016 despite stable demand and high occupancy rates.
• The closures were a drag on net absorption in third quarter 2017 for a total of 88,000 sf of negative absorption.

High occupancy ​

• However, high demand for new space led to 64,000 sf of activity in new product alone offsetting the closures and bringing the total net absorption to 116,000 sf .

• Class A occupancy has been extremely tight for over two years and currently sits at 98.1 percent.

• O​​verall occupancy is high as well at 96.2 percent—the highest retail occupancy in Texas.

• The Austin retail development pipeline continues to deepen reaching construction activity on par with 2013 levels.

• The largest developments are both mixed-use projects including Plaza Saltillo in East Downtown and Belterra Village in West Austin/Dripping Springs.

• Both developments follow national trends of focusing heavily on entertainment and restaurant to create an experience for consumers.