- CRE Daily
- Posts
- Austin's Tech Star Fades as Talent Heads Back to the Coasts
Austin's Tech Star Fades as Talent Heads Back to the Coasts
A former Sunbelt darling, Austin is watching its tech momentum stall as coastal hubs reclaim their gravitational pull.
Jordan B.
May 27, 2025
Together with
Good morning. A former Sunbelt darling, Austin is watching its tech momentum stall as coastal hubs reclaim their gravitational pull.
Today’s issue is sponsored by BetterPitch—craft institutional-grade decks that help you close with confidence.
Market Snapshot
|
| ||||
|
|
TECH HUB
Austin's Tech Boom Hits a Wall as Talent Returns to the Coasts
Photo: Brandon Bell/Getty Images - WSJ
Once the poster child for pandemic-era tech migration, Austin is now losing ground to San Francisco and New York.
What happened: In 2024, Big Tech employment in Austin fell 1.6%, while startup jobs dropped 4.9%, per SignalFire. Meanwhile, San Francisco and New York saw job growth across the board—2.2% and 1.8% in Big Tech, and 3.7% and 0.8% in startups, respectively. Other Sunbelt cities like Dallas, Houston, and Denver also saw declines.
Rising star to recalibration: Austin once attracted giants like Oracle and Tesla with lower taxes and looser regulations, but many have since downsized or moved again. Disillusioned transplants now cite a lackluster tech scene, weak public infrastructure, and limited local opportunities compared to coastal markets.
Office mandates: As Silicon Valley cements its role as the hub of artificial intelligence, and companies push return-to-office mandates, coastal cities are reclaiming talent. Austin’s high cost-of-living swings and underbuilt transit aren't helping its case.
Zoom out: Housing economist Jay Parsons dismissed the job losses as “a nothing burger,” likely within the margin of error. He attributes Austin’s swings to its smaller market size and mix of stable and volatile job sectors. Despite the cooldown, he notes Austin still ranks top 10 nationally in population, job growth, and apartment absorption.
➥ THE TAKEAWAY
What comes next? Austin isn’t collapsing—it’s correcting. The tech chill is real, but so is Austin’s staying power. For now, it’s a market in flux, not freefall.
TOGETHER WITH BETTERPITCH
Hundreds of real estate GPs use BetterPitch to raise capital. See how.
Top institutional investors don’t just buy the deal, they buy the deck.
BetterPitch helps leading real estate funds craft institutional-grade marketing collateral that secures capital in any market. Access real examples of investor-facing materials used by successful GPs to win over pensions, endowments, and family offices.
With BetterPitch, you get:
✅ Sample pitch decks that secured institutional funding
✅ Financial visuals that simplify complex underwriting
✅ Risk frameworks that speak to allocator concerns
✅ Market research and analysis that drive conviction
🔵 Access the sample materials → and level up your fundraising game.
*This is a paid advertisement. Please see the full disclosure at the bottom of the newsletter.
✍️ Editor’s Picks
Rate relief: Fed Governor Christopher Waller signaled potential interest rate cuts in late 2025 if Trump-era tariffs stabilize around 10% by mid-year.
Deal of the day: Greystone closed a record $901M multifamily CLO backed by 28 bridge loans across 16 states.
Timber expansion: Weyerhaeuser is acquiring 117,000 acres of timberlands in North Carolina and Virginia for $375 million.
Singapore play: Brookfield is eyeing more deals with discounted Singapore REITs after acquiring a $414M business park portfolio from Mapletree Industrial Trust.
🏘️ MULTIFAMILY
Bankruptcy block: NYC landlord Joel Wiener placed thousands of apartment units into bankruptcy to halt foreclosure actions tied to over $500M in liabilities.
GSE gamble: Trump’s push to privatize Fannie Mae and Freddie Mac sent shares soaring—but experts warn it could drive up mortgage costs and rattle the housing market.
Fort Worth fallout: Majestic Realty faces leadership turmoil and a lawsuit amid broader shifts in Texas CRE during its $1B Stockyards expansion.
Resident retention: Camden saw record-low turnover in Q1 2025 as renters stayed put amid affordability and market uncertainty.
Casino collapse: Related, Wynn, and other major players are retreating from New York’s casino race, as political pushback, rezoning hurdles, and local opposition derail billion-dollar bids.
🏭 Industrial
Solar deal: Digital Realty is buying 5.1MW of Illinois solar power from Summit Ridge to support data center sustainability.
Port pressure: Tariff swings are disrupting imports at the Ports of LA and Long Beach, slowing warehouse leasing and prompting tenants to rethink supply chains, port strategies, and lease timing.
🏬 RETAIL
Don’t call it a comeback: Retail thrives in growth markets despite tariff concerns, while LA struggles with restaurant space and permitting hurdles.
McClosure: McDonald’s is shutting down all standalone CosMc’s locations in June, shifting its experimental drink offerings into core restaurants instead.
🏢 OFFICE
Make it pencil: Firms face rising costs to build flexible, high-quality offices that attract workers back amid policy and market uncertainty.
Legal leasing: Law firms doubled large leasing activity in Q1 2025, favoring renewals and premium spaces amid rising build-out costs and limited top-tier inventory.
Second shot: The U.S. may shed 11 federal buildings to save $5.4B, with many eyed for housing or mixed-use reuse.
🏨 HOSPITALITY
Disposing assets: Park Hotels & Resorts sold the 316-room Hyatt Centric Fisherman’s Wharf in San Francisco for $80 million as part of its push to offload non-core assets and reinvest in higher-return projects.
Headwinds: LA hoteliers warn of rising distress as a proposed $30 minimum wage, lingering revenue struggles, and capped workloads threaten valuations and scare off investors.
A MESSAGE FROM FRANKLIN
From Confusion to Clarity—Leverage 25+ Years of Real Estate Experience. One Call Away.
Deals stall. Partners flake. Financing falls through. Time is of the essence. Move forward with clarity, not guesswork—guided by an experienced real estate consultant. Receive expert strategies to:
Structure smarter deals, faster
Win investor trust & raise capital with confidence
Accelerate business development
Optimize profitable investment strategies
Mitigate risk with effective investment due diligence
Book a free discovery call now to make "Fully Informed" progress or text Franklin directly: 559-270-6776
*This is a paid advertisement. Please see the full disclosure at the bottom of the newsletter.
📈 CHART OF THE DAY
Figure 1: U.S. Equities PE Ratio / CRE PE Ratio, Expressed as a Z-Score
With equities trading at historically high multiples, commercial real estate now appears undervalued by comparison, potentially offering a more attractive entry point for investors, reports CBRE.
You currently have 0 referrals, only 1 away from receiving Multifamily Stress Test Model.
What did you think of today's newsletter? |
Reply