Austin just posted the strongest job growth in the country over the past six years, and the tech boom did not do it. A report released this month ranks the metro first nationally in blue-collar job growth and second in white-collar. That single divergence explains most of what happened in September: industrial pipelines are full and pushing outward in every direction, downtown’s construction pipeline has gone almost completely quiet, and the tallest tower in Texas opened carrying the largest block of empty office space in Austin’s history.
Waterline is complete. At 74 stories and 1,025 feet, the 2.7 million-square-foot tower at 98 Red River takes the state height title from Houston’s JPMorgan Chase Tower by 23 feet, and it was delivered in 48 months — two ahead of schedule.
Its office space, spanning 24 stories plus two amenity floors, has no disclosed tenants. According to CoStar’s Austin director of market analytics, that is the most available office space any project has delivered with in the city’s recorded history, and it will push Austin’s vacancy — already at roughly 20%, the highest since CoStar began tracking in 2000 — slightly higher. A $742.5 million mortgage on the project comes due next year.
The rest of the building is performing. 1 Hotel Austin opened 252 rooms across 13 floors before Labor Day at $600 a night for a standard room, and residents are moving into the 352 Bosque apartments on the top 33 floors. The vertical stack works. The office floors are the open question.
There is precedent worth remembering. Meta preleased the entirety of Sixth & Guadalupe in December 2021 and never occupied it. Google preleased Sail Tower and took until this year to move in — and is now investing $25 million to renovate roughly 69,000 square feet of shell space there. Large downtown blocks in Austin have a history of taking years to convert from signed to occupied.
The demand side is holding up better than the vacancy figure suggests. Austin led all ten major U.S. markets in office attendance in the week ended August 26, at 73.7% of pre-pandemic levels — nearly 21 points above the 52.9% national average. Austin did ease from 76% the prior month as part of a broad late-summer pullback: New York fell hardest, to 53.8% from 65.8%, and Washington, D.C., dropped to 45.8% from 51.6%. Dallas and Chicago held roughly flat.
Traditional leasing was quiet. What moved was flexible space — a second consecutive month of coworking expansion, and all of it suburban. Lucid Private Offices signed roughly 20,000 square feet at Las Cimas III for a March 2027 opening, its second Austin location after Stonebridge Plaza II near the Domain opens in November, and it is hunting a third site in Bee Cave. With 18 coworking firms now active in Austin, a third location would make Lucid the metro’s sixth-largest operator.
Crews broke ground on September 14 at 415 Lavaca Street on a 30-story, 336,800-square-foot dual-branded Hilton splitting 480 rooms between Embassy Suites and Tempo. Peachtree Group and Merritt Development Group are co-developing, with DPR Construction as general contractor and an early 2029 opening targeted.
The more consequential detail is what it says about everything else. This hotel is reported to be one of the only buildings that will be under construction downtown for the foreseeable future, with Endeavor’s 5th & Walsh among the very few starts in the past year. After a decade of near-continuous cranes, the CBD pipeline behind Waterline is close to empty.
Read those two facts together and the picture sharpens. Downtown absorbed a record block of new supply this month, and it is unlikely to absorb another for years. For owners of existing quality product, the supply-side math is improving even as the vacancy headline worsens.
Meanwhile, the street itself is being rebuilt. The Congress Avenue Urban Design Initiative, funded by the 2020 Mobility Bond, is reconstructing the avenue block by block from Cesar Chavez to 7th Street, with Phase 1 completing by 2027. Angled parking bays convert to pedestrian amenity zones for dining and shopping, granite pavers and new street furnishings go in, concrete barriers replace flex posts along the bikeway, and planting areas expand soil volume for existing and replacement trees. The tradeoff is roughly 37 on-street parking spaces, about 0.6% of downtown’s on-street public supply.
Two blocks east, Old Sixth is signing the first tenants of its next era. Emmer & Rye Hospitality Group — whose portfolio includes Michelin-starred Hestia alongside Emmer & Rye, Canje and Ezov — leased 520 East Sixth Street for a restaurant opening in fall 2027, and Taqueria De Diez takes 2,500 square feet at 500 East Sixth for early 2027. Stream Realty has assembled 31 buildings and 200,000 square feet along the strip since 2020 and is targeting at least three operating restaurants by the end of 2027. A city redesign of the corridor with wider sidewalks and a curbside delivery lane has a recommended plan but no funding yet.
Austin added just over 242,000 jobs between 2019 and 2025, up 21.8% — the strongest rate of any metro in the United States, according to a report released this month by economic strategy firm Economic Leadership drawing on federal data and Lightcast.
The composition is the story. Austin ranked first nationally in blue-collar job growth at 33.2%, second in white-collar at 27.6%, and seventh in service at 9.6% — top ten in every category except military. Dallas added more total jobs than any metro at 434,000, but no other Texas metro cracked the top ten by rate. Austin’s employment base now stands near 1.56 million, with 337,500 residents added since the 2020 census. Opportunity Austin counts roughly 1,900 manufacturers in the region, about 500 of them high-tech.
This is the quiet explanation for the divergence running through the rest of this update. A metro that grew fastest on manufacturing, logistics and skilled trades is a metro whose industrial absorption outruns its office absorption. The report also names the headwinds honestly: affordability, slowing domestic and international migration, and AI potentially touching up to 30% of jobs.
Amazon confirmed on August 20 that it will build a roughly 300-acre advanced robotics manufacturing facility at Dog’s Head in East Austin, supporting 300 to 500 jobs with completion possible by the fourth quarter of 2027. Crews are clearing dirt and setting the first pads. Endeavor’s broader vision for the 2,600-acre former mining tract along the Colorado River runs to millions of square feet of commercial space and more than 12,000 residential units, against an estimated $5.6 billion infrastructure bill.
The financing is not settled. Austin established the tax increment reinvestment zone on July 23 in a 7–3 vote, but Travis County has taken no action, leaving Endeavor unable to market the site to users until the county acts and the city approves its regulating plan this fall and financing plan in March.
| Project | Size | Detail |
|---|---|---|
| Amazon / Dog’s Head | 300 acres | East Austin robotics manufacturing · 300–500 jobs, possible Q4 2027 |
| Partners / RCR Park | 573,000 SF | Taylor spec building · Developer seeking more land |
| Aeon / Cedar Park | 280,000 SF | Defense tech nearly tripling · Expanding before delivery |
| Headwater & La Tierra / Elgin | 120,000 SF | Bastrop County’s first spec building ever · Second 130,000 SF project in talks |
| Siete / Buda Commerce Center | 177,000 SF | Reaching 396,000 SF at the park |
| Titan / Georgetown | Vertical | Last spec building goes up · Five years ahead of schedule |
Bastrop is the one worth pausing on. Speculative developers had skipped the county for years even as Williamson and Hays boomed. Now a 120,000-square-foot shallow-bay building is rising in Elgin — the first major speculative project in the county’s history — with a second 130,000-square-foot development in talks with the Bastrop EDC. The pull is the cluster around it: Samsung in Taylor, Musk’s Bastrop campus, the Tesla gigafactory and the redeveloping Alcoa site in Milam County, plus the suppliers and vendors that follow them.
The Boring Company raised $3 billion in a Series D announced September 9, led by the UAE and affiliated investment entities with Sequoia, a16z, Temasek, Valor Equity, Vy Capital, Human Capital, Shamal Holding and Baron Capital participating. The company is now valued at $23 billion, up from roughly $5.7 billion at its 2022 Series C. It is the third time this year Austin’s startup funding record has fallen.
| Company | Raise | Notes |
|---|---|---|
| The Boring Company | $3B | Series D at a $23B valuation; 30+ Austin-area roles posted |
| Fab2 | $500M | Series A |
| HiddenLayer | $100M | Series B, security software for agentic and generative AI |
| Light | $46M | Series A, API platform for branded electricity plans |
| Saronic (March) | $1.75B | The record Boring just broke — after Base Power’s $1B |
The state backdrop matched it. The Texas Stock Exchange landed its first corporate primary listings, with Energy Transfer, Sunoco, SunocoCorp and USA Compression Partners moving over from the New York Stock Exchange in October — together roughly $100 billion in market value. And Austin acquirers went hunting for data center infrastructure: Flex agreed to buy California-based EPC Power for $4.4 billion, folding it into a segment it plans to spin off in 2027, while Salute agreed to acquire T5 Operations, creating a business that would manage more than 15 gigawatts of capacity across 150-plus markets.
One policy item is worth tracking into the fourth quarter. Under Opportunity Zones 2.0, 605 Texas sites were nominated for federal tax breaks, including Census Tract 11.01 downtown — East 6th Street up to 12th, between I-35 and Shoal Creek. If certified, the program offers capital gains abatement on eligible investment. Treasury is expected to certify the roster by November 28.
September’s through-line is divergence. Austin’s economy grew faster than any metro in the country over the past six years, and it did so on manufacturing and skilled trades more than on software. Industrial absorption followed the jobs outward — into Taylor, Georgetown, Cedar Park, Buda and now, for the first time, Bastrop. Office did not follow, because that is not where the growth went.
For downtown owners, the vacancy headline and the supply picture point in opposite directions. Waterline just added the largest block of available office in Austin’s history, which is genuinely difficult. But the construction pipeline behind it has emptied, attendance here remains the strongest in the country, and the street-level investment — a rebuilt Congress Avenue, a re-tenanting Old Sixth — is arriving now rather than someday. Supply stops growing well before demand stops recovering.
For occupiers, the window is clearer than it will be later. Large contiguous blocks of trophy space are available today at a record vacancy rate, with almost nothing new coming behind them. That combination does not tend to last.
ECR is a full-service commercial real estate firm based in Austin, Texas. This market update is prepared for informational purposes and reflects conditions as of September 2026. Data sourced from CoStar, Kastle Systems, Austin Business Journal, Texas CEO Magazine, the Downtown Austin Alliance, Economic Leadership and public filings.