State of Downtown Report 2023

Great downtowns don’t just happen. They are built by people and organizations that care deeply about making downtown welcoming, vibrant and vitally important to the culture of the city. And this year, people flocked back to downtown Austin and organizations met this demand with exciting new developments, businesses, venues and events.

Far from returning to “a new normal,” downtown is on the precipice of a major transformation.

Downtown has two important assets — our diversity and our energy — that we must protect to keep it thriving year after year. The diversity of industries downtown buffers us against economic uncertainty and the resulting diversity of people and ideas also makes downtown Austin the place to be. Downtown’s energy is an intangible asset, but it’s ultimately what makes people want to live, work, invest and visit here. It is what makes Austin stand out from other major cities. To keep this vibe, downtown must remain welcoming and affordable to everyone.

Downtown Austin is On Demand

Storefront businesses are adapting to shifting trends by adding more food, drink and entertainment options in response to downtown’s weeknight and weekend popularity. Developments are becoming more flexible in finding a larger number of smaller tenants for more businesses to locate downtown. Events hosted downtown are beautifully diverse, culturally relevant and work toward increasing diversity and belonging in the area. Downtown is ever-changing and malleable, and Austinites are driving the change they want to see in their city’s central hub.

Here are just a few stats showcasing downtown’s growth as it responds to demand:

• 17 projects totaling 5.54 million square feet were delivered in 2022.
• Downtown has 8,260,873 square feet under construction.
• In 2022, downtown hotel occupancy rates reflected a full resurgence of travel, events, conventions and the nightlife economy.
• Despite vacancy rates increasing slightly since 2021, there is still a strong demand for downtown office space and this space commands high rents.
• With 95% of pre-pandemic visitor activity regained and employees continuing to return to the office, downtown has a healthy level of pedestrian activity to support its 680 storefront businesses.

State of Downtown Report 2023