What is the average cap rate for commercial real estate in Austin?

There is no single useful average — Austin cap rates span more than 300 basis points by property type. As of mid-2026: industrial trades around a 7.5% market cap rate (CoStar, Q2 2026), multifamily roughly 5.2–6.0% (CoStar and Matthews put the Q1 2026 market figure at about 5.2–5.7%, with stabilized deals clearing 5.5–6.5% per Northmarq), Austin retail carries a 6.4% market cap rate with multi-tenant strip centers at 6.5–8.5%, and single-tenant NNN retail runs roughly 5.5–7.0% for investment-grade tenants with term. Any quoted 'Austin average' is really a blend of these very different risk prices.

Which property type has the highest cap rate in Austin in 2026?

Among the major traded asset classes, industrial currently carries the highest market cap rate at about 7.5% (CoStar, Q2 2026), a direct result of the supply wave that pushed Austin industrial vacancy to 14.1% — the highest among the 50 largest U.S. industrial markets. Multi-tenant strip retail with rollover or weak tenancy also prices 8%+. Office is a special case: with vacancy in the low-20s percent, office trades are bespoke and often priced on dollars per square foot against replacement cost rather than a meaningful market cap rate.

Why are Austin multifamily cap rates so much lower than industrial?

Because the market prices risk, not property type prestige. Austin multifamily demand is deep — the metro adds roughly 53,000 residents a year — and the 2024–25 delivery wave is thinning fast (from about 30,000 units delivered in 2025 to roughly 10,000 in 2026), so buyers accept ~5.2–6.0% for durable, recovering income. Industrial is mid-way through absorbing a record supply wave with 14.1% vacancy, so buyers demand ~7.5% to be paid for lease-up risk. Same city, different risk — about a 200 basis-point spread.

Market insight · July 28, 2026 · Steven Owen

Austin commercial real estate cap rates by property type (2026)

There is no single “Austin cap rate” worth quoting — the spread across property types is more than 300 basis points. As of mid-2026: industrial ~7.5% (CoStar market cap rate, Q2 2026), multifamily ~5.2–6.0% (Q1 2026 market figures of ~5.2–5.7% from CoStar and Matthews; stabilized deals clearing 5.5–6.5% per Northmarq), retail 6.4% market cap rate with multi-tenant strip centers at 6.5–8.5%, and single-tenant NNN roughly 5.5–7.0% for investment-grade credit with term. Office is the outlier — with vacancy in the low-20s percent, deals are bespoke and priced on basis versus replacement cost more than on a market cap rate. The spread isn’t noise; it’s the market pricing very different risks in the same city.

The numbers, in one table

Austin cap rates by property type, mid-2026 (sources and dates as noted)
Property type	Cap rate	Source & date	What’s driving it
Industrial	~7.5%	CoStar market cap rate, 2026 Q2	14.1% vacancy — highest of the 50 largest U.S. industrial markets — after a record supply wave; buyers priced for lease-up risk
Multifamily (5+ units)	~5.2–6.0%	CoStar / Matthews Q1 2026 market ~5.2–5.7%; Northmarq stabilized range 5.5–6.5%	Deep renter demand, delivery pipeline thinning from ~30k units (2025) toward ~10k (2026); capital returning ahead of recovery
Retail (market overall)	6.4%	CoStar Austin retail, June 2026	3.4% market vacancy; trailing deals cleared 3.9–9.0% depending on format
Retail — strip centers	6.5–8.5%	SCORE / CoStar analysis, June 2026	Rollover, local tenant credit, and management priced wider than single-tenant; best Class A trades 5.5–6.5%
Single-tenant NNN retail	~5.5–7.0% (IG credit); 7.0–9%+ (franchisee/short term)	Boulder Group Q1 2026 national benchmarks (net-lease retail ~6.55%); Texas often at or inside	Tenant credit and lease term set the number; corporate QSR ground leases as tight as ~4.4–5.45%
Office	No meaningful market figure	Q1 2026 vacancy reported ~22–27% depending on tracker	Price discovery ongoing; trades are bespoke, often on $/SF vs replacement cost
Development land	n/a — not cap-rate priced	—	Priced on residual value to the developer, not income; see the land valuation guide below

Why the “average” misleads

A cap rate is first-year net operating income divided by price — which makes it a risk price, not a quality score. Averaging a 5.4% stabilized apartment deal with a 8.5% vacant-anchor strip center produces a number that describes neither. When you see “Austin commercial cap rates average X%,” the honest translation is: somebody blended asset classes with 300+ basis points of legitimate spread between them. The useful question is never the citywide average — it’s the clearing rate for your asset type, tenancy, and submarket, on a dated source.

Type by type: the one-paragraph version

Industrial (~7.5%) is the widest-priced major asset class in Austin right now, and for a knowable reason: the 2022–25 construction wave pushed vacancy to 14.1%, with big-box speculative space (100,000–250,000 SF) near 25% vacant while small infill product stays tight near 9%. Recent sales ran roughly $140–$207/SF depending on stabilization. Full numbers in the Austin industrial cap rates report.

Multifamily (~5.2–6.0%) is the tightest, because the demand side never broke — the metro adds roughly 53,000 residents a year — and the record ~30,000-unit delivery year of 2025 gives way to roughly 10,000 units in 2026. Buyers are underwriting the recovery before it fully shows in rents, which is why Northmarq reports stabilized deals clearing 5.5–6.5% with sales volume up to start the year.

Retail (6.4% market; strip 6.5–8.5%) hides the biggest internal spread. Austin retail vacancy is just 3.4%, and the tightest formats (power centers, general retail) trade at cap rates in the 2s and 4s on trailing deals — while multi-tenant strip centers price at 6.5–8.5% because the buyer takes on rollover and local tenant credit. The format-by-format table is in the strip center cap rate breakdown.

Single-tenant NNN (~5.5–7.0% investment grade) is priced off the lease, not the dirt: tenant credit, guarantee type, and remaining term move the number more than location does. National net-lease retail asked ~6.55% in Q1 2026 (Boulder Group), and Texas assets often price at or slightly inside national benchmarks for the same tenant and term. Ranges by tenant type are in the Texas NNN cap rate guide.

Office is where a quoted “market cap rate” would mislead: with Q1 2026 vacancy reported anywhere from ~22% to ~27% depending on the tracker, the bid side prices individual buildings on basis — dollars per square foot against replacement cost, lease-up assumptions, and capital needs. Averages built on a handful of distressed and trophy trades aren’t a market; they’re anecdotes.

Development land doesn’t have a cap rate at all — it produces no income. Developers price it on residual value: what the finished project supports after costs and profit. If you own land and someone quotes you a “cap rate,” that’s a red flag; the right framework is in how Austin development land is valued.

How to actually use these numbers

Three rules keep cap-rate conversations honest. First, date the number. Every figure above carries a quarter and a source because a 2024 cap rate quoted in 2026 is a different market. Second, compare within type. A 7.5% industrial deal is not “cheaper” than a 5.5% apartment deal — it’s a different risk being paid differently. Third, ask what the rate is paying you for. Higher cap = the market wants compensation for something: vacancy, rollover, credit, capex. Find out what that something is before assuming it’s free yield. That diligence — matching the rate to the actual risk in the rent roll — is most of the work in pricing a deal correctly.

Pricing a specific Austin property?

Averages set expectations; deals clear on specifics. Send the property and we’ll run the number for its actual asset type, tenancy, and submarket — with current comps, not last year’s.

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Current as of July 2026. Sources: CoStar Austin market reports (industrial Q2 2026; retail June 2026), Matthews and Northmarq Austin multifamily reports (Q1 2026), The Boulder Group Net Lease Research Report (Q1 2026), and published Q1 2026 Austin office reports. Figures are market-level indicators, not offers or valuations of any specific property; individual assets trade wide of any range shown. Related: Industrial cap rates · NNN cap rates · Strip center cap rates · Live market data.