Author Tahera Rahman
This post originally appeared on KXAN Austin
AUSTIN (KXAN) — The pandemic’s economic impact translated to closed-up storefronts in a usually thriving downtown area.
The Downtown Austin Alliance compiled data showing just how much downtown businesses suffered.
The alliance said as of February, about 20-25% of downtown storefront businesses are seemingly empty.
“88 storefronts have reportedly closed, and another 96 storefront businesses we’re unsure about,” said Jenell Moffett, Downtown Austin Alliance Director of Research and Analysis, during Wednesday’s report presentation.
Visits to the office also dropped dramatically during the pandemic.
“Downtown office visits dropped by almost 90% in April. As restrictions changed, we’ve seen an uptick of employees returning… however, we’re still well below pre-pandemic levels,” Moffett said.
Employers also put discussions on pause about what work would look like post-pandemic and vacancies nearly doubled throughout 2020.
“Many were hesitant to lock down terms for office space. Subsequently, vacancy rates increased as well,” Moffett said.
But empty storefronts don’t necessarily reflect the future of downtown, which the alliance said is poised for a rebound.
John Gump, Austin executive vice president of CBRE, a global commercial real estate company, said the demand for office space right now is about the same as what it was before the pandemic.
“It feels like we’re back full steam ahead,” Gump said.
He said they’re tracking more than 2 million square feet of demand — tenants who are actively either looking for a new space or to move from an existing space.
“It will translate into deals, it will translate into decreased vacancy rates, increased absorption of space, probably towards the end of the second quarter, beginning of the third quarter and definitely into the fourth quarter,” Gump said.
Why the demand?
Gump said more companies from the east and west coasts are moving to Austin, and businesses already here are either looking for more space or a different space as they shift to hybrid working.
“‘Look, if we’re going to take a little less space, we might as well make sure that the space that we do take really is suited well for our needs, and we’re willing to pay a little more for it,” Gump explained.
The Downtown Austin Alliance said five towers are set to open this year that will deliver more than 1.5 million square feet of office space. They said that would break all previous yearly records for Austin.
Gump said he’s already seeing a lot of demand for those spots.