CRE Daily
Posts
Austin Multifamily Poised for a Turnaround in 2026 After Prolonged Rent Declines

Austin Multifamily Poised for a Turnaround in 2026 After Prolonged Rent Declines

Austin rents have fallen for 10 straight quarters, but falling construction and a projected demand surge in 2026 could finally tip the balance.

Nina Dale
February 04, 2026

Together with

Good morning. Austin’s apartment market has been on a long slide, with rents falling for 10 consecutive quarters. But new data from Colliers suggests a turnaround could be coming in 2026 as supply cools and demand ramps up.

Today’s issue is sponsored by Henry — helping brokers and sponsors create deal-winning decks in a fraction of the time.

🌵 Inside Texas: Subscribe to CRE Daily Texas to get tomorrow’s Texas real estate briefing, plus the deals and capital moves shaping the state.

CRE Trivia 🧠

What industry accounted for the largest share of new U.S. job growth in 2025?

(Answer at the bottom of the newsletter)

Market Snapshot

S&P 500

GSPC

6,917.81

Pct Chg:
-0.84%

FTSE NAREIT

FNER

767.26

Pct Chg:
+0.36%

10Y Treasury

TNX

4.269%

Pct Chg:
-0.008

SOFR

30-DAY AVERAGE

3.66%

Pct Chg:
-0.00

*Data as of 2/3/2026 market close.

Inflection Point

Austin Multifamily Poised for a Turnaround in 2026 After Prolonged Rent Declines

Rents in Austin’s apartment market have dropped for 10 straight quarters, but a shift may finally be on the horizon.

Downward pressure: According to Colliers, average asking rents in Austin dropped again in Q4 2025 to $1,396, down from $1,478 YoY, marking the 10th straight quarterly decline. Class B properties bore the brunt of the pullback as supply continued to flood the market.

Source: Colliers

Demand slips into reverse: In a notable shift, demand softened, flipping net absorption into the red at -230 units, compared to +8,586 units absorbed in Q4 2024. Occupancy followed suit, dipping 40 basis points to 92.4%, signaling growing pressure across the board.

There’s one big positive: New deliveries are finally easing. Just 3,764 units came online in Q4 2025, down nearly 50% from the prior year. Ongoing construction also fell dramatically, from nearly 27,000 units to 16,595.

Promising outlook: Colliers forecasts a rebound in late 2026, with demand jumping to 19,425 units against just 10,153 new deliveries. Occupancy is expected to hit 95.2%, rents to rise slightly to $1,407, and construction to drop below 10,000 units.

➥ THE TAKEAWAY

Return to balance: Austin's oversupplied multifamily market may have finally bottomed out. With a dramatic slowdown in deliveries and construction, the stage is set for a recovery—assuming demand returns as forecast.

TOGETHER WITH HENRY

Still Spending Weeks Building Pitch Decks?

High-volume brokers and sponsors don’t have time to babysit designers just to end up with templated slides and forgettable PowerPoints.

Henry transforms your underwriting into visually striking, on-brand presentations built to stand out with investors, lenders, and clients.

AI builds the first draft using your OMs, BOVs, loan packages, and deal data. Professional designers then refine and finalize it before delivery.

Spend less time formatting. More time closing.

*This is a paid advertisement. Please see the full disclosure at the bottom of the newsletter.

✍️ Editor’s Picks

There’s more to AI than ChatGPT: Build practical AI skills for your real estate business over 8 weeks and earn your Columbia Exec Ed Certificate. Save $500 with early enrollment + code CREDAILY before Feb. 17. (sponsored)
Debt distress: CMBS delinquencies rose to 4.66% in January 2026, up 10 basis points from December, with office loans continuing to be the sector's biggest drag.
Bank failure: Philadelphia-based Republic First Bank became the first 2026 bank failure, highlighting growing concerns over CRE’s impact on regional lenders.
Scale your fund without the $100K bill: Streamline waterfalls, compliance, accounting, and reporting with fund administration software and services designed for accuracy and growth at a fraction of the cost. (sponsored)
Rate trap: CRE experts warn that holding out for lower interest rates could backfire, as timing the market may cause investors to miss solid opportunities in a stabilizing economy.
Lease shield: Inflation-linked leases and pass-through expenses are proving to be effective tools for property owners seeking to preserve income in a high-cost environment.

🏘️ MULTIFAMILY

Demand rebound: U.S. apartment demand surged in Q4 2025, marking the strongest fourth-quarter absorption in decades and hinting at a potential market stabilization.
Sunny surge: Developers are ramping up multifamily projects in West Palm Beach, banking on surging rental demand and population growth to fuel new construction.
Quiet collapse: Chicago’s South Shore neighborhood is grappling with a wave of foreclosures and neglected buildings, revealing systemic failures in affordable housing investments.

🏭 Industrial

Big pharma: Eli Lilly will build a $3B manufacturing facility in Lehigh Valley to produce its blockbuster weight-loss drugs, boosting regional development and jobs.
Storage saturation: Self-storage occupancy fell in 2025 as oversupply met cooling demand, signaling a potential rebalancing phase for the once-hot asset class.
Celebrity vision: Rapper 50 Cent plans to transform Shreveport, Louisiana, into a content and entertainment hub, aiming to draw industry talent and investments.
Reno reach: Equus Capital Partners acquired a 1.4M SF industrial portfolio in metro Reno for $96M, doubling down on Nevada’s logistics and manufacturing growth.
Warehouse win: Bridge Industrial secured an $86M loan to fund a major logistics development in New Jersey, reflecting continued lender interest in industrial real estate.

🏬 RETAIL

Mall makeover: Struggling malls are experimenting with exclusive clubs and experiential concepts to backfill vacant space and attract affluent consumers.
Chapter 11: Outdoor apparel retailer Eddie Bauer is shutting down its store fleet, becoming the latest legacy brand to exit brick-and-mortar amid shifting retail dynamics.
Fresh shuffle: As Amazon Fresh closes several locations, traditional grocers and discount chains are lining up to backfill the prime retail space.

🏢 OFFICE

Loop loss: A 1.4M SF office building in Chicago's Loop sold for just $45M—an 85% discount—highlighting how far office values have fallen in stressed urban markets.
Broadway boost: Burlington signed a 67K SF lease expansion at 1400 Broadway in Midtown Manhattan, reinforcing apparel’s surprising resilience in a shifting office landscape.
Downtown deal: Tishman Speyer leased over 160K SF to two firms at 50 California Street, offering a glimmer of hope for San Francisco’s embattled office sector.

🏨 HOSPITALITY

Luxury launch: Kempinski is bringing its first branded residences to Miami’s Design District, betting on strong demand for ultra-luxury, service-driven living.
FIFA fever: With the 2026 FIFA World Cup on the horizon, hotel operators are preparing for a tourism boom by ramping up staffing, development, and international partnerships.

INVESTOR SENTIMENT

Is CRE Turning Cautious or Leaning Back In?

Where is CRE sentiment heading next? Take our 5-minute Fear & Greed Survey and help shape the data investors are watching across sectors.

Responses are 100% anonymous, and you’ll get early access to the results.

*This is a paid advertisement. Please see the full disclosure at the bottom of the newsletter.

📈 CHART OF THE DAY

Slowing margin growth and EBITDA compression in Q3 2025 signal potential declines in private-equity distributions amid a tight exit environment.

CRE Trivia (Answer)🧠

According to U.S. Bureau of Labor Statistics, healthcare and social assistance accounted for roughly 97% of net new U.S. jobs added in 2025.

Austin Multifamily Poised for a Turnaround in 2026 After Prolonged Rent Declines

Austin rents have fallen for 10 straight quarters, but falling construction and a projected demand surge in 2026 could finally tip the balance.