STATE of DOWNTOWN QUARTERLY
Quarter 2 • July 2024
Return to Downtown: Visitors Love Downtown
Downtown area employees have been steadily going back into the office since the peak of COVID-19 in 2020, hitting 69% of the 2019 average as of July 2024.
Weekday employee population hit a post-pandemic quarterly high in Q2 2024, reaching a daily average of 36,163 people. While the average number of visitors has slightly declined from 2023 levels, the number may increase in the fall months with the return of high-occupancy festivals and events.
Source: Placer.ai, July 2024
Downtown Average Daily Visits
Source: Placer.ai, July 2024
Return to Downtown: Office & Entertainment
Average Weekday Employee Population
Source: Placer.ai, July 2024 Source: Placer.ai,
The average weekday employee count has remained well below 2019 levels despite hitting a post-pandemic quarterly average high in Q2 2024,
The month of March continues to see the highest count of visitor traffic in downtown’s entertainment districts, driven by the SXSW festival. East 6th and Red River districts saw a 11% increase year-over-year in 2024.
Total Monthly Visits By Entertainment District
Rainey St. Red River East 6th St. West 6th St.
Downtown Development Pipeline
The Downtown Austin Alliance has marked one project delivered in 2024 so far, totaling approximately 347,000 square feet. The number of projects kicked off has dropped as developers navigate the market and evaluate the financial viability of starting new projects.
Source: Downtown Austin Alliance, July 2024
*Note: The Downtown Austin Alliance reclassified several projects thatwe are tracking to reflect“Mixed Use”. This reclassification allows for a more accurate representation of the type of demand the market is experiencing.
Downtown Development Since 2000
Source: Downtown Austin Alliance, July 2024
Office Market Fundamentals
Source: CoStar, Q2 2024
The downtown office market is still recovering from the effects of the pandemic, with vacancies surpassing 20% in 2024.
While asking rates downtown have remained 38% higher than the rest of Austin, rates have begun to compress in 2024, falling by 8% from Q4 2023. Professional, financial and business services firms have bolstered leasing activity downtown, helping offset the slowdown of tech leasing activity in the region.
Sublease Activity in Downtown
0 250,000 500,000 750,000 1,000,000 1,250,000 1,500,000
Source: CoStar, Q2 2024
Hotel Market Fundamentals
Hotel Occupancy Rate
Downtown Occupancy Austin Occupancy
Source: CoStar, Q2 2024
After a slight slowdown in the second half of 2023, the hotel market rebounded in the first half of 2024. Occupancy increased to 77%, and the Average Daily Room Rate was approximately $270.
The total solar eclipse in April 2024 saw a record number of travelers come to Central Texas, which helped spike occupancy and revenue for Q2 2024.
Hotel Average Daily Room (ADR) Rate
Source: CoStar, Q2 2024
Downtown
Downtown
Retail Market Fundamentals
Downtown Retail Asking Rent & Occupancy Rates
Net (NNN) Asking Rent PSF Occupancy Rate
Source: CoStar, Q2 2024
Demand for retail space downtown remains robust, with occupancy rates above 95%. Asking rates have slipped in 2024, falling 10% from the Q4 2022 high of $40 per sq. ft. With decreasing asking rates, there is an opportunity for tenants who traditionally wouldn’t be able to rent space downtown due to financial constraints to now be able to explore available space.
Triple
Downtown Austin food trucks bustle with activity.
Housing Market Fundamentals
$2.90
$2.80
Source: CoStar, Q2 2024
As the epitome of the live/work/play model in Central Texas, the housing market downtown is bracing for a massive influx of new product to deliver in the next two years. While this influx has compressed the average daily asking rent per sq. ft., it has also allowed more people to take advantage of all the benefits of living downtown.
Downtown Market Asking Rent Per Sq. Ft.
Downtown Apartment Absorption & Deliveries
