Austin’s Draw: high cap rates, occupancy
Austin is getting a lot of attention from the East and West Coast
investors. Cap rates have been steadily on the rise this past year and
continue to improve. This story is from the Texas A&M Retail Center:
As the metro’s retail market edges toward a four-year high for all indicators, investors and tenants are pushing hard for a piece of the action. Vacancy is hanging at 7 percent, the best reading of the state’s four metropolises. A recent report by Marcus & Millichap Real Estate Investment Brokerage Co. puts cap rates for multitenant properties in the mid- to high 7 percent range. Single-tenant assets are perking along at a 7 percent cap rate, on average, while properties filled by top-tier tenants are producing in the mid-6 percent range.
In the first quarter, a six-property portfolio, totaling 660,000 square feet, brought $75 million, the brokerage house’s researchers reported. A recent study showed single-family housing sales rose 4 percent just in the past month. The push for product to keep pace with the rooftops has developers raising 2.7 million square feet, a slight increase from last year’s construction level.
According to a Weitzman Group analysis, the 28.5 million square feet of existing retail space is 93 percent filled. Morris says the true indicator as to the market’s strength will be how quickly 11 Albertson’s grocery stores will be filled. The store closings were Aug. 3-18, leaving the metro with five Albertson’s when the dust settles on the Boise, ID-based grocer’s retreat.
Popularity: 3% [?]
