Absorption in the retail sector in Austin continued its downward slide in Q2 2020, registering (627,511) sq. ft. of net demand.
The organizers of the beloved Austin City Limits music festival announced that the iconic festival would be cancelled in 2020 due to COVID-19. The festival generates more than $250 million for the local economy annually, ranking behind only South by Southwest for annual events.
The statewide closures of non-essential businesses have taken a toll on the local economy, driving numerous local establishments and eateries to shutter permanently. With uncertainty surrounding the future, the list of local favorites closing is likely to increase.
Despite the sliding market fundamentals, development activity remained strong in Q2 2020, with 48 projects currently underway, totaling approximately 1.3 million sq. ft. Most of these projects are slated to deliver during 2020; with preleasing low, these projects will negatively affect retail fundamentals further.
Market-wide occupancy decreased to 95.2% in Q2 2020 as the average asking rate decreased to $20.50 per sq. ft.