Austin Retail Construction Surges with 1.24 Million Square Feet Added in 2025

More than a million square feet of new or expanded retail space is expected to be delivered in Austin by the end of 2025, according to a new report, more than double the amount added in 2024.

If that much is completed, it would mark the first time since 2016 that deliveries of such space in the Austin area have exceeded 1 million square feet.

According to a mid-year market report from Weitzman, a Dallas-based commercial real estate firm, developers are planning to add 1.24 million square feet of space across the five-county Austin metro area this year, up from 485,520 square feet in 2024.

IN 2024: Austin-area retail market healthiest in Texas due to high demand, low new supply

“The retail market’s strength is boosted by the Austin area’s strong economic activity,” Weitzman said. “For example, the area’s unemployment at mid-year was a near-full-employment rate of 3.1 percent, compared to the national unemployment rate of 4.2 percent.”

Most of the new space can be attributed to the large number of big-box shopping center anchor stores increasing their footprints in Austin, the report said, including Lowe’s, H-E-B, Home Depot, Costco and others.

Manor Crossing, a growing retail center, accounts for a significant chunk of the increases. A 134,000-square-foot Home Depot opened there in May and an H-E-B store is set to be completed later this year, adding another 100,000 square feet.

Despite the burst of growth, Austin’s occupancy rate remains high at 97%.

“Austin is once again the healthiest major retail market in Texas in terms of occupancy and balanced supply and demand,” Weitzman’s report said.

Both San Antonio and Dallas-Fort Worth trail in occupancy, with rates in both cities sitting at about 95%. But Dallas-Fort Worth is expected to nearly triple Austin’s deliveries of retail space this year.

In Austin, tenants like Crunch Fitness, Burlington and Trader Joe’s are taking over empty spaces, stunting the impact of high-profile retail shutdowns like Conn’s, which closed all its stores after filing Chapter 11 bankruptcy a year ago, and contributing to the high occupancy rate.

For example, Trader Joe’s moved into a 17,000-square-foot former Office Max store at Shops at the Galleria, and Crunch is backfilling a 45,000-square-foot space formerly home to Conn’s HomePlus at Southpark Meadows III.

New deliveries have not reached or exceeded 1 million square feet since 2016, when 1.1 million square feet across the metro area that stretches from Georgetown to San Marcos. Beginning in 2007, when 640,000 square feet of new space was delivered, annual totals have been relatively limited. The high point for new deliveries was 2007, when developers added 4.2 million square feet of retail space.

Though Austin’s growth has slowed in recent years, with a growth rate of 2.3% Austin now is the nation’s 25th fastest-growing metro area, according to the U.S. Census Bureau’s 2023-2024 update.