Why Austin's Real Estate Market Is Divided

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Welcome to Austin Founders Feed, your weekly rundown on the people, companies, events, and opportunities shaping one of the most exciting business scenes in the country.

This week, we’re looking at Austin’s commercial real estate divide, where data center vacancy has fallen to nearly zero while offices and industrial space remain widely available.

Here’s everything that’s happening this week:

Let’s get to it.

— Ken & Warren

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Try to lease data center space in Austin and you'll find 0.14% vacancy, the tightest market in America.

Try to lease an office and you'll find the opposite: roughly 1 in 5 square feet sits empty.

We dug into Austin's commercial real estate market to find out why. Here's the vacancy rate in each of Austin's real estate sectors as of mid-2026:

Why? Austin's economy moved faster than its buildings.

Since 2023, demand has surged into data centers and AI infrastructure, and retail was already tight. Since 2021, hybrid work and a historic warehouse building spree left offices and industrial properties oversupplied.

But that oversupply won’t last forever.

Businesses have taken more office space than they've given back for four straight quarters. Developers finished about 85% less industrial space in the first half of 2026 than a year earlier. And apartment deliveries are projected to fall from roughly 33,000 units in 2024 to as few as just 4,600 this year.

The empty space giving tenants leverage today isn't being replaced.

Need an office or warehouse? You may have some of the strongest negotiating power Austin has offered in years. Deals under 10,000 square feet made up 40% of all leasing in the first half of the year, small tenants are driving this market, and landlords know it.

Need a prime storefront or data center capacity? You're competing for some of the scarcest real estate in the market.

In Austin, real estate isn't scarce. Real estate with the power, location, and infrastructure your business needs is.

Jami Adkins and Andrés Traslaviña
Founders, People ATX

Ten minutes into a first call, a founder will lean in and ask the question they came with: what do you do that the retained firms we already know don't? Fair question. The answer starts one step earlier than the search itself.

Retained search, the way we both learned it, treats the job description as the starting line. When roles held still for years, that worked. We came up in that craft and we respect it. What changed isn't the craft. It's the question underneath it. AI is rewriting what the work is while you're interviewing, so the description you post is out of date the day it goes up. You can fill that role perfectly and still have hired for a chair that's changing shape.

So we start with a harder question: what are you actually paying this person to do? Not the title, even the one your board handed you. We take the capabilities someone promised the business and dissect them with you, one by one. What should AI carry. What your people should own. What capability isn't on your org chart yet. Sometimes the finding is that you don't need to hire yet. Naming that early is worth more than filling a seat fast.

At this stage, the most important decision you'll make isn't the product or the raise. It's the team you build around the leader. The best companies we've watched all did the same thing: they surrounded the leader with complementary talent. Not more of the same. Complementary. That's where good hires compound and bad ones get caught early.

Here's the distinction we build the whole practice on. There's a difference between placing a candidate and selecting one.

Anyone can place. Selecting means a plan before we go to market, market intelligence brought back to your business, and a scorecard that measures every candidate the same way: what they must have accomplished by month six, twelve, and eighteen. The decision is never a feeling in the room. That matters most at a smaller company, where one hire moves everything and unconscious bias moves it quietly.

Placing a candidate is easy. Selecting the right one is the whole job.

Only then do we open the search, and the same person who built the plan with you runs it, calling the people who aren't applying, because the ones who can do these jobs almost never are. They're being recruited quietly, while they're still winning somewhere else.

And here's the part that gets lost in the AI noise. The work still needs the person. More than before, not less. When AI takes the routine, what's left is judgment, trust, and the ability to read a room. That part doesn't automate. What the work no longer needs is the traditional job description wrapped around it.

One wrong executive hire at a small company can burn a quarter of your runway. Planning before you post is how you buy that risk down before it costs you.

One conversation.

In practice, in 2026, they're the same conversation, because deciding who to hire and deciding what AI changes about your organization are no longer separate questions. We focus on talent strategy, retained executive search, and AI change management.

The work is changing. The person still matters. We build for both.

Read the full story here, and our free 2026 Talent Report is at peopleatx.com/report.

The Austin metro continues to add residents at one of the fastest rates in America, even as population growth slows across much of the country.

The numbers:

Taken together, the numbers show Austin’s economic footprint continuing to expand outward. The growth is increasingly regional. The Census Bureau found that many of Texas’ fastest-growing counties are now on the outer edges of major metros, as population expands beyond the urban core.

Sip & Swipe is a relaxed founder meetup hosted by United Solutions, bringing Austin entrepreneurs together for FREE coffee, new connections, and honest conversations about building businesses.

No panels. No presentations. No forced pitches.

Just a room full of founders swapping ideas, sharing what they’re working on, and meeting people who might be able to help them move it forward.

Whether you’re looking for feedback, collaborators, customers, or just more builders in your circle, come grab a coffee and join us.

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