Austin CRE holds steady in 2018Austin CRE holds steady in 2018https://www.recenter.tamu.edu/news/newstalk-texas/?Item=221692019-03-20T05:00:00Z2019-03-23T00:00:00Z

​​​​​​Projected Overall Vacancy Rates​AUSTIN – Fourth quarter 2018 commercial vacancy rates across the metro were below their estimated natural rates, according to the Real Estate Center's first-ever Texas Qua​rterly Commercial Report​.


Actual vacancy has hovered around 9 percent since mid-2015, well below the natural vacancy of 13 percent. It is expected to stay constant in the near-term, averaging 9.4 percent for 2019.

Rent growth is expected to slow to 2 percent in 2019.

The quarter ended with approximately 100,000 sf under construction. Net absorption has declined quarterly since the beginning of 2017, with 4Q2018 seeing 167,000 sf of negative absorption.

Construction values indicate that there will be a decrease in construction activity due to the significant decrease in values seen in 4Q2018.


Actual vacancy continued to hover around 4 percent in 4Q2018, still much lower than the natural vacancy of 6 percent. Rent growth is expected to slow through 2019, averaging 1 percent for the year.

Retail space under construction totaled approximately 153,000 sf, the lowest in over ten years.

The supply of retail space has exceeded demand over the past two quarters, with 4Q2018 seeing a low of approximately –140,000 sf absorbed.


Actual vacancy measured below the natural vacancy of 11 percent, totaling 6 percent in 4Q2018. It is expected to average 4.8 percent in 2019, a level well below the natural vacancy. This should spur new development.

Rent growth has continued its downward trend throughout 2018, ending 4Q2018 at –​2.3 percent. Over 2019, rent growth is expected to average 1.5 percent, bolstered by strong warehouse and transportation employment growth.

Net absorption measured positive over 2018, ending the fourth quarter around 225,000 sf.

Real Estate Center
Austin-Round Rock
https://www.recenter.tamu.edu/articles/technical-report/Texas-Quarterly-Commercial-ReportSource: {Source}

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