The signs are everywhere; from the headlines to the cranes to the population increases, the commercial real estate in Austin is booming. For nonlocals, the secret is out. According to Mike McDonald, vice chairman of Cushman & Wakefield, “It’s the hottest market in the country right now.”
Business Flocking to Austin
Business has always been enticed by Texas. With numerous tax incentives, a robust populace, and lots of land, Texas is primed for commercial real estate development. But the preference of Austin to Dallas or Houston is a recent trend.
In 2020, 154 companies announced that they would either be expanding their Austin-based operations (109 companies) or moving to Austin from outside Texas (45 companies). And, while these numbers are slightly below that of 2019, they are an impressive testament to the resilience of the Austin market. A recent survey from AFIRE claimed that Austin is the #1 US city for planned investments in 2021, ranking ahead of Boston and Dallas. What’s more, many of these investors are foreign.
Big Tech in Austin
Austin has been a tech city for more than 60 years. Tracor, IBM, and a University of Texas think tank were some of the first tech presences in the 60s and 70s. They were followed by Dell and Microelectronics Computer Consortium (MCC) in the 80s, just to name a few of the tech juggernauts that have rooted themselves in Austin. So, it’s little surprise that tech companies have been flocking to Austin ever since.
In 2019, Apple announced it would be expanding its Austin presence with a billion-dollar campus, which is slated to be finished in 2022. Additionally, Samsung has recently been tossing around the idea of opening a $17 billion chip manufacturing plant. For tech companies stifled by Silicon Valley, Austin is a breath of fresh air.
Charlie W. Malet of Shorenstein Properties told the New York Times in March, “[Austin] has become the second home for a large cluster of the larger tech companies.” With Austin’s legacy as a tech town and a shift in commercial real-estate preferences to the Sun Belt, these developments reflect broader changes in the market.
Other Commercial Development in Austin
The city doesn’t just stop at tech. To match the demands of a growing population, entertainment complexes have been cropping up in and around the city.
Kalahari Resorts and Conventions in Round Rock is a massive example of non-tech commercial real-estate that has found a home in the Austin area. Additionally, a significant housing and shopping development was recently approved by the city of Round Rock. Situated near Kalahari and the Dell Diamond, the project’s goal is to offer more value to the densely populated area.
One thing is clear: commercial real estate in Austin is on fire, and it doesn’t look like it will be extinguished any time soon.
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