Limited availability continues to constrict market activity. Class A occupancy only registered down slightly during the final 90 days of 2017. Retailers aren’t just on the search for prime, Class A space, overall occupancy is high as well at 96.3%—the highest measured in Texas.
Net absorption continued to fall off peak levels registered in 2015, while new construction captured a large portion of demand—over 150,000 sq. ft. of the 247,000 sq. ft. absorbed. Large blocks were occupied this quarter by fitness tenants including Crunch Fitness and Orangetheory Fitness.
CBRE Econometric Advisors forecasts Austin retail sales volumes to reach $29.7 billion in 2018, a 6% increase from 2017. Similar sales growth is projected to continue over the next five years at an annual rate of 5.6%, higher than the U.S. average.
Once again Texas population gains grew faster than any other state between July 2016 and July 2017. This reflects 190,000 net migrations from elsewhere into Texas, according to recent data from the U.S. Census Bureau. Growth in the technology industry has contributed to population gains in Austin which are concentrated in suburban submarkets like Williamson County.