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According to USA Today, Austin, Texas, is the number one destination for starting a business. Austin also has strong job growth and is experiencing rapid population increases. These factors make it an ideal location for commercial real estate (CRE) investing.
How do you get involved in this booming Austin CRE market in 2025? Here’s everything you need to know.
Why It’s Time to Diversify Your Portfolio
Real estate investments, particularly commercial properties, are viewed as a strong hedge against inflation. However, if you want to sustain the strength and resilience of your CRE portfolio, you need to include a balanced mix of property types.
That doesn’t mean you must invest in every commercial real estate niche. Instead, try to have at least a few different property types in your portfolio. This diversification can make your portfolio more resilient to local and national economic challenges.
Let’s say your real estate portfolio includes a mix of flip houses, multiunit rental properties, and industrial space. If the home-buying market dips due to high interest rates, more people will turn to rentals to address their housing needs. Likewise, if overall housing market demand drops, the lease revenue from your industrial space can help stabilize your portfolio.
Diversification Options in Austin
There are plenty of diversification options in Austin:
- Office Spaces: Despite challenges, Austin has relatively high demand due to the city’s thriving tech and startup scene
- Retail Properties: Well-located retail remains important to Austin consumers
- Industrial Sites: These properties often offer stable, long-term leases
- Multifamily Units: As Austin’s population grows, so does the need for affordable housing
Focus on incorporating at least two complementary CRE categories into your portfolio and add more as your investing goals evolve.
How to Match Property Types With Your Investment Goals
Your choice of property should align with your specific investment objectives. Do you want to generate long-term passive income for consistent cash flow, or is appreciation your top priority? Consider what you want to achieve and identify the properties that best align with those goals.
For example, suppose that you want to increase a property’s value through renovations or improved management. In this case, you might focus on older office buildings or retail spaces that are underperforming.
Factors to Keep in Mind in 2025
When expanding your CRE portfolio in Austin this year, be mindful of the following factors.
Market Trends
Stay informed about Austin’s economic indicators, such as job growth and population trends. Even minor fluctuations can impact property demand and values. An experienced Realtor can help you determine a fair value for investment properties so you can get more bang for your buck.
Zoning
Make sure you are aware of local zoning laws, especially if you intend to overhaul a property for a new use case. For example, if you want to turn a commercial office building into an industrial space or vice versa, be prepared for zoning limitations that may stand in your way.
Tenant Stability
Rental properties won’t yield stable returns if they are frequently unoccupied. Review the leasing history and occupancy rates of any potential investments before adding them to your portfolio.
Sometimes, you can resolve occupancy issues with better management strategies or property upgrades. Still, it’s important to know what sort of challenges you are taking on before you put your cash on the line.
Don’t Go It Alone — Team Up With a Local Pro
Adding commercial real estate to your portfolio is a huge decision. Don’t make it without the guidance of a local Realtor who knows the Austin market inside and out.
An experienced Realtor will help you find and purchase properties that align with your investment strategy while providing local insights to inform your decision-making processes.
Contact Andrea Curry, Realtor
Whether you are breaking into the commercial real estate market or you have your sights set on diversification, the right Realtor can make all the difference.
Drawing on my extensive experience in the greater Austin area, I’ll help you identify the right CRE properties for your portfolio. Contact me today to discuss your investment goals.
