Austin is the capital of the state of Texas and the 11th-most populated city in the United States. The Greater Austin area, which comprises five counties, has a population of over 2 million people. Named the U.S. News and World Report’s “Best Place to Live in the U.S.” in 2017, Austin is a thriving cultural hub, home of the South by Southwest technology and arts festival, and the Live Music Capital of the World. Since the Great Recession, Austin has emerged as a standout economic powerhouse, with a highly educated workforce and a diverse industrial set including creative and digital technologies, education, government, law, and life sciences driving rapid regional growth. In particular, Austin has been noted as an emerging epicenter for high tech, having earned the nickname ‘Silicon Hills’ for the Central Texas region in a nod to California’s Silicon Valley. Austin's largest employers include the Austin Independent School District, the City of Austin, Dell Technologies, the U.S. Federal Government, IBM, St. David's Healthcare Partnership, Seton Family of Hospitals, the State of Texas, the Texas State University, and the University of Texas at Austin. Major high-tech companies with operations in Austin include 3M, Apple, Amazon, AMD, Apartment Ratings, Applied Materials, ARM Holdings, Bigcommerce, Bioware, Blizzard Entertainment, Buffalo Technology, Cirrus Logic, Cisco Systems, Dropbox, eBay, PayPal, Electronic Arts, Flextronics, Facebook, Google, Hewlett-Packard, HomeAway, Hostgator, Intel Corporation, National Instruments, Nvidia, Oracle, Polycom, Qualcomm, Rackspace, RetailMeNot, Rooster Teeth, Samsung Group, Silicon Laboratories, and Xerox.
Sustained growth in Austin’s professional and business services sector [brought about by exponential population gains] is a driving force behind demand for office space within the Austin market. Major tenant relocation and expansion has spurred new office product development, growing the market by nearly eight million square feet since 2008. Austin’s Central Business District remains a popular location for office space, though tenants seeking more attractive rental rates will find the North/Domain and East submarkets desirable. As a hotbed for start-up centric office tenants and tech giants alike, Austin’s office market is poised for new trends in office usage.
While healthy, Austin’s industrial market is the city’s least active commercial sector. Much of Austin’s industrial space is housed in the Southeast and East submarkets, as the availability of land allows for the development of new industrial and flex facilities. Low vacancy rates and a stacked construction pipeline indicate strong demand for industrial space, despite the present threat of Austin’s industrial product being redeveloped for mixed-use and creative office space as an opportunity to further expand Austin’s more prominent commercial sectors.
Ranked by Urban Land Institute as the number one city for Real Estate Investment and Development in 2017, Austin’s real estate investment landscape has evolved immensely with new development and the availability of a variety of commercial assets. Blockbuster sales such as the Central Business District’s 100 Congress prove Austin to be a prime candidate for top-dollar transactions, while employment gains and a diversifying economy entice domestic and international investors to both Austin’s Central Business District and suburban markets.