Austin Retail 2026
Scarcity, Capital, and the New Rules of Investment
If Austin Is Undersupplied, Why Aren’t We Overbuilding?
Because retail development in Central Texas is a grind.
Yes, rents are strong and occupancy is high. But development is slowed by:
high land costs (especially in growth corridors)
long entitlement timelines
construction costs
lender requirements for pre-leasing
equity partners being cautious about development risk
Retail doesn’t get to be sloppy. Retail still has to pencil.
The irony: the difficulty of building retail is exactly what protects value for those who already own it.
Retail doesn’t get to be sloppy. Retail still has to pencil.
“Retail is back to being viewed as a safe harbor — stable, predictable, and lower risk than other asset classes right now.” — Wes, Colliers
The irony: the difficulty of building retail is exactly what protects value for those who already own it.
The Risk Nobody Wants to Say Out Loud: The Consumer
I asked the question that matters most:
If retail is the safe haven, what’s the risk nobody’s talking about?
The answer: the consumer.
“The biggest risk in retail right now is the consumer — inflation pressure eventually shows up in how confidently businesses expand.” — Wes, Colliers
Inflation and rising costs are squeezing tenants—especially small operators. That shows up in how confidently businesses expand, how easily they swallow rent increases, and how much margin they can keep after labor, supplies, and operating costs.
Retail is performance-driven. Tenants can pay the rent as long as sales support it.
Expenses Are the Quiet Threat: Taxes, Insurance, Triple Nets, Security
Even in strong markets, expenses can break leasing velocity.
We talked about how:
real estate taxes can get so high they distort “all-in” occupancy cost
insurance keeps climbing
security can become a real operating line item
triple nets can squeeze tenants even when base rent seems reasonable
“If real estate taxes keep climbing, eventually they start to impact property value.” — Brent Campbell, Don Quick Associates
Smart ownership isn’t about bragging rights on the highest base rent.
Smart ownership is about:
keeping your tenant healthy and your building full.
Institutional Capital Is Reshaping Austin
Austin used to be treated like a secondary market. Not anymore.
Institutional and quasi-institutional capital is competing harder in Austin retail, which compresses yields and changes the playing field for private buyers. Over time, that means more competition, tighter pricing, and a continued premium placed on “quality” product.
The $20 Million Question: Where Smart Money Wants to Go
I closed the panel with a challenge:
“If I hand you $20 million and you have to deploy it into Central Texas retail — what are you buying or developing, where, and why?”
The answers pointed to the same truth:
This is a value-creation market.
Themes that came up:
under-rented assets with lease rollover upside
older power centers where term is burning off and rents can reset
vacant drive-thrus (when located right)
growth corridors tied to rooftops and major employment drivers
smaller sites where you can develop with tenants lined up and exit clean
No one said “buy perfect and do nothing.”
That’s the mindset of people who understand where the market is headed.
FULL TRANSCRIPT
00:52 – DeLea Becker:
Everybody, welcome to the last panel — and of course the best panel… This one kept going and going on the pre-panel call… a rowdy bunch with a lot of opinions backed up by data… encyclopedias of deals… Let them introduce themselves starting with Wes…
01:50 – Wes:
Hello, good morning… Wes with Colliers.
01:55 – Nick Tarantino:
Nick Tarantino, Tarantino Properties, morning.
02:02 – Brent Campbell:
Brent Campbell with Don Quick Associates.
02:05 – Brad Bailey:
Brad Bailey, CBRE, good morning.
05:13 – Kevin Murphy:
Kevin Murphy with Franklin Street…
02:15 – DeLea Becker:
My name is DeLea Becker with Beck-Reit… I’m going to have each give a project you’re working on — lease, get out of the ground, etc.
02:32 – Panelist (Development focus):
Involved with three development projects… will develop several buildings… dispo of some single net, some multi-tenant… also tenant rep and acquisitions/dispositions…
03:18 – Nick Tarantino:
Tarantino started in 1980… management, leasing, construction… always looking for deals… In Austin we’re buying a vacant office… recent retail acquisitions have been out of state… day-to-day property management, trying to lease space…
04:06 – Brent Campbell:
I head up retail division… projects being built in Pflugerville… growth in that region is crazy… also do a little development and acquisitions…
04:42 – Brad Bailey:
We do retail, industrial, some office… closed a Popeyes… focus Waco down to San Marcos within two-hour radius…
05:13 – Kevin Murphy:
Vertically integrated company… lead Texas retail team… representing owners and seekers… significant deal: former 7,000 SF restaurant near Wells Branch/35… rolled out for sale/lease… surprised at feedback…
06:21 – Kyle (Newmark):
Most recently sold Wolf Ranch Town Center and Lakeline Plaza Village… Oak Hill Plaza for sale…
06:47 – DeLea Becker:
Retail is my favorite asset type… most flexible… boutique developer… epic to be in retail… Wes is a walking encyclopedia — tell us how far we’ve come in the last 12 months.
07:44 – Wes:
Retail is solid again… safe harbor for stability, predictability, lower risk… From 2000–2010 X retail built; 2010–2020 half X… population growth + low development → occupancies 97–98%… rental rates increased… retail SF per person declined… Institutions increasing allocation to retail… 2025 retail acquisitions $76B up from $56B in 2024… office $86B… Blackstone invested heavily in retail… no duress in retail; office has distress/value-add…
13:40 – DeLea Becker:
Retail has outperformed eight straight quarters nationally… Austin transaction volume is muted — capital markets issue, confidence issue, or “no one has to sell”?
14:06 – Kyle:
Mostly “no one has to sell”… only six retail trades over $25M… larger assets finally trading: Wolf Ranch, Lakeline, Arboretum, Gateway Plaza… REITs under-allocated to Austin so they’re not sellers… Austin under-retailed… low 40s retail SF per capita… hard to develop…
15:48 – Brad:
Private client side (30M and under): owners don’t have to sell… metrics good… development process difficult… fear of not being able to buy back in… long hold periods — 15–20 years, even 36 years…
17:08 – Kevin:
Office activity = opportunistic distress… retail = demand… barriers high… Washington Prime new ownership turning properties experiential… exciting because little new pipeline unless anchored by a big box…
18:47 – Wes:
Complement to private side point… retail trades mostly end-of-hold/merchant/institutional rebalancing…
19:45 – Brent:
Williamson County perspective… used to do 10–20 transactions/year; last year had three… nobody needs to sell… value here…
21:01 – Nick Tarantino:
Multi is hard, office repricing, industrial softening… retail is a great place… constraints make it hard to invest here…
21:39 – DeLea Becker:
Austin trades core retail in 4s/5s… low retail per capita… high occupancy… barriers… why aren’t we massively overbuilding?
22:44 – Brad:
Too much headache… timelines difficult… less room for error… even 25 bps change affects exit cap rate…
24:15 – Kyle:
More development next 3–5 years but equity checks are huge… institutions reluctant on development equity… may change as they try to get product…
25:03 – Brent:
Neighborhood projects 10k–50k SF… land prices are big factor… Williamson County retail land $20–$22+/SF… hard to make work… approvals tough everywhere…
25:37 – Wes:
Barriers: construction costs, entitlement, risk, equity capital, lender underwriting… retail typically must be pre-leased… if not zoned, not worth zoning risk…
27:24 – Kevin:
Retail follows rooftops… Liberty Hill growth… as rooftops complete and rates come down, activity increases…
28:50 – DeLea Becker:
If retail is the safe haven today, what’s the risk nobody’s talking about?
29:31 – Wes:
The consumer… inflation pressure… “tail of two cities”… lower-income struggling… small business owners pause… question is whether consumers can keep spending and small operators keep expanding…
31:50 – Nick Tarantino:
Businesses constrained… moving costs high… landlords pushing rents… businesses selling to new groups — something to watch…
32:48 – Brent:
Triple nets $14–$16… long-term concern: taxes too high could devalue assets…
33:25 – Wes:
Real estate taxes are largest triple net component… sometimes had to moderate base rent because triple nets too high… tax protests matter…
34:11 – Nick Tarantino:
Security is an issue and an exorbitant cost — watch it…
34:30 – Brad:
Institutional money competing with private clients compresses returns… could lead to institutionalization even at $2–$3M deal size…
36:21 – Kevin:
Watching tenant turnover + reinvestment cost… prefer partnership approach so tenants can stay profitable…
37:44 – Wes:
Rents continue to grow… outliers: Music Lane over $200/SF… Domain North… retail rent is formula-driven by sales volume… triple nets huge…
40:26 – DeLea Becker:
Magic $20 million bag of cash — deploy into Central Texas retail. Buy/develop where and why. You’ve got nine days.
41:25 – Brad:
Buy under-rented single-tenant net lease assets with short term… (value-add on rollover).
41:34 – Kyle:
Late 90s/early 2000 fitness/power centers… rents under market… also drive-thrus in the marketplace (Chick-fil-A type boxes), opportunistic plays…
42:11 – Brent:
Development opportunities in the tech corridor (Samsung region)… growth from Rockdale through Round Rock…
42:57 – Nick Tarantino:
Suburbs growing, follow rooftops… tough to find the right cap rate with debt… (market is competitive).
43:18 – Wes:
Agree with opportunistic short-term net lease and vacant drive-thrus… I’d also secure well-located corners in growth areas with tenants in tow, finance a project with guarantees, build and exit…
44:47 – DeLea Becker:
What would I do? I’d take $15M and buy car washes, laundromats, anything with high cost-seg/bonus depreciation… take $5M and buy small cinder block buildings… tenant them with CBD/THC shops… they pay 10–20% more in rent…
46:21 – Audience / Moderator:
Questions?
46:40 – Kevin:
1031 buyers — last year vs this year?
47:09 – Brad:
Q4 was extraordinary, December monumental… steady 1031… also seeing 1033 (condemnation/road construction) money redeploying… estate planning and inherited assets may drive activity…
48:56 – Audience question:
Are retailers using parking lots to generate revenue (EV charging, etc.)?
49:20 – Wes:
Common area control depends on leases; anchors and restrictions can limit what landlords can do.
49:54 – Kyle:
EV charging is happening; easier on smaller properties where NOI impact is meaningful; expect more of it.
50:16 – DeLea Becker:
Thank you for your time, gentlemen — your expertise. That concludes our retail and mixed-use conference…
Conclusion
Austin retail is strong because it’s constrained.
We underbuilt retail for years.
Demand kept growing.
Development is difficult (and therefore protective).
Investors want stability — and retail is delivering it.
But retail isn’t bulletproof.
The key swing variable for 2026 is the consumer — and the ability of tenants to keep absorbing rising occupancy costs (taxes, insurance, and triple nets).
For owners and investors who underwrite conservatively, watch expenses, and stay disciplined on tenant economics, retail in Central Texas remains one of the most compelling long-term holds out there.
WORKBENCH: Delivering March 2026