Word that Apollo Global Management put Austin on a short list of cities for a second headquarters seemed like a mistake.
The hype around the Texas capital in the last decade hit like a flashbang; it was so disorienting that you could be forgiven for assuming there was nothing left afterward.
Inquiries like Newsweek’s: “What’s behind Austin’s mass exodus?” paint a pretty clear picture. People and companies are lining up to get out. So why would Austin even cross the mind of a Wall Street giant like Apollo, let alone come up in speculation about its next move?
Austin may no longer wear the tech-darling crown, but it’s growing fast and remains a hot spot for companies looking to relocate to the Sun Belt.
May 2026 Census Bureau population data show Austin passed the 1 million mark for the first time in 2025. The city has grown 4.2 percent since 2020. Among the top 50 most populous cities in the country, Austin’s numerical population growth between 2020 and 2025 ranks ninth. In each year of the first half of this decade, Austin has added at least 4,000 residents.
And while it isn’t quite competing with the business-friendly Dallas in 2026, it continues to play a happy second fiddle. Between 2018 and 2025, North Texas added 111 new headquarters, according to data from CBRE. In the same period Austin netted 89. Last year, DFW logged 11 corporate relocations, while Austin saw 7. In 2021, Austin did beat Dallas, 32 to 30.
That’s not to say the last decade was steady or sensical. The shifts were objectively dramatic. In the span of fewer than five years, Austin spent time as the nation’s hottest housing market and its coolest.
“It’s not a recession, but it almost feels like a recession, just by comparison,” said Steve Triolet, a Dallas-based real estate expert.
If city-level population growth was an endless race, Austin sprinted to take the lead in 2021, got a charley horse and fell back to the middle of the pack to replenish electrolytes. It didn’t drop out.
Peel back the crust, and Texas real estate experts from brokerages to the Dallas Federal Reserve are still hot on Austin. Their confidence isn’t just big talk. It hinges on hard numbers that indicate that when the clouds clear, people with money will still be hot on Austin, too.
Defense mechanism
That charley horse was Austin’s tumultuous multifamily market.
After rapid population growth sent rent prices soaring, developers lined up to meet the need. They’ve delivered 107,000 apartment units in the past six years, according to data from Cushman & Wakefield. To put the spree in perspective, about a third of the city’s apartment inventory was built between 2020 and now, said Sam Tenenbaum, Cushman’s head of multifamily insights who splits his time between Austin and New Jersey.
Rent growth peaked at the end of 2021 before turning negative in the second quarter of 2023 and plummeting for more than three straight years, according to rental housing economist Jay Parsons. East Austin and suburbs like Pflugerville and Leander got the most new supply. The properties hit hardest were Class B and C properties which lost occupants to nicer units that were now discounted.
Cushman’s data show Austin’s multifamily vacancy rate shrunk to below 6 percent in 2021, its lowest for the decade. It peaked at 16 percent in 2024, far surpassing the national average of 9.3 percent. Now it’s 13.5 percent.
“We built too much. But we also absorbed more than we ever have in the history of the city.”
Still, Parsons calls the “Austin is dead” narrative “one of the dumbest things out there.”
“When you have that much growth, there are going to be people who say, ‘This isn’t for me.’ And, that’s fine. But, the broader trend is not that people are moving out of Austin. The trend is much more of moderating and normalizing,” he said.
His confidence is rooted in the city’s steady growth numbers. Despite reports of an exodus, the area continues to grow — just at a slower pace than before. Part of which can be attributed to migration from Austin proper to cheaper nearby hamlets in Williamson, Hays and Bastrop counties.
The state and the nation trail Austin in job growth. The latest report shows that Austin saw 1.2 percent growth between April 2025 and April 2026, compared with 0.8 percent statewide and 0.2 percent nationwide, according to the Federal Reserve Bank of Dallas.
Tenenbaum calculated the market’s years of inventory or the time it would take to absorb the lagging vacancy and the amount of development still in the pipeline. Despite the deluge of supply, the number is less than two years, he said.
Plus, the pipeline of multifamily projects is finally drying up. That, compared with steady growth prompts Laila Assanie, a senior business economist with the Federal Reserve Bank of Dallas, to project that Austin rent growth will turn positive in 2027.
Tech bubble
Lincoln Property Company’s Seth Johnston has his own metaphor to describe how the last decade fits into the narrative of Texas’ quirky capital: Austin hit puberty.
“We built too much,” he admits from an office in The Republic, one of three trophy office buildings, totaling more than 2 million square feet, which Lincoln has delivered in Downtown Austin since 2023. “But we also absorbed more than we ever have in the history of the city.”
The saga of Austin’s office market left a unique impression of whiplash that’s exemplified in the trajectory of its star tech anchor, IBM.
Big Blue opened its first plant in the Texas capital in 1967, laying the groundwork for the city’s future tech booms. It’s Uptown Austin campus, now owned by Philadelphia-based Brandywine Realty Trust, was built in the early ’90s.
A quarter-century later, tech heavyweights were battling for trophy office, with Meta and Google gobbling whole downtown buildings. IBM announced plans to move to a built-to-suit trophy office developed by Hines in the summer of 2023.
Soaring interest rates soon rained on the big-tech office showdown, and Hines’ plans were scrapped about a year after the project was announced. IBM instead agreed to assume Meta’s full-building lease at Domain 12.
Meanwhile, Brandywine teed up a sweeping transformation of the IBM campus that included demolition of the aging office buildings upon the tech giant’s exit. Those plans were scrapped, too, and the trust pivoted to renovation, dropping the expected portion of office space at the project from one-half to one-third.
“It’s not a recession, but it almost feels like a recession, just by comparison.”
Office trophies claimed by Meta and Google sat vacant for years, as tech behemoths offered up expensive leases on the swelling sublease market. Almost four years later, Meta has trimmed its nearly 600,000-square-foot office chunk down to about 488,000 square feet. Last summer, it landed subtenant PricewaterhouseCoopers, which took 32,000 square feet of the space.
“They took a lot of space at the wrong time,” Johnston said.
But, they haven’t left, he noted. Neither did the colossal tenant whose projected exit reverberated like a death knell for Austin as a tech hub: Larry Ellison’s Oracle. Ellison shared his vision of a $4.5 billion Nashville headquarters in 2024. But construction delays, layoffs and reports of hiring challenges have slow-walked the move.
The fundamentals are solid: The development pipeline has dwindled. The overall vacancy rate sits at about 23.3 percent, Triolet said, citing CoStar data, though it’s elevated in the central business district, pushing 30 percent. Submarkets like The Domain in North Austin are relatively unfazed, posting vacancy rates in the mid-teens.
Even with Austin’s growth spurt, it remains a second-tier office market. With less than 92 million square feet of inventory, it’s less than half the size of Houston’s 198 million-square-foot office market and about a quarter of DFW’s, which spans 325 million square feet, according to first-quarter reports from Colliers.
Open for business
Austin faces the same headwinds as the rest of the country in a post-pandemic world plagued by tariff uncertainty, zero-tolerance immigration policy, soaring costs, trade wars and regular wars.
Like other American cities, mass deportations and border closures have choked Austin’s population of immigrant workers. Artificial intelligence’s productivity gains dampened the demand for work. High interest rates and inflation translate to fewer projects getting built.
That doesn’t mean there’s nothing Austin can do to woo out-of-town corporate tenants.
Mayor Kirk Watson is promoting a more hands-on approach to courting business after claiming that Austin has grown “too passive” now that the cultural frenzy’s died down. The city’s reliance on its status as a magnet for talent and business has kept it on the sidelines, he argued.
From Johnston’s perspective, Watson’s tune is a welcome change: “The messaging from the city over the last five to 10 years has been: We are not open for business,” Johnston said, citing feedback from prospective tenants.
Looking ahead, Tenenbaum predicts that Austin’s future as a tech hub won’t be about its ability to play second- or third-fiddle to San Francisco.
The next generation of Austin tech is very hardware-oriented, he said, pointing to the founding of the U.S. Army Futures Command in Austin in 2018. The warfare innovation effort merged with the Army Training and Doctrine Command to form the Army Transformation and Training Command in 2025, an Austin-based command that runs 350,000 people deep.
There’s also the proliferation of chip manufacturing across Central Texas, plus Base Power’s conversion of the former Austin American-Statesman building into a battery factory. And Icon, the Austin unicorn that made a splash at SXSW with its 3D-printed homes in 2022, is cashing in on the hardware trend with a federal partnership (and a $57 million grant from NASA) to develop space-based construction tech.
The Austin tech scene is embracing this new era with concepts like Proto-Town, a 1,200-acre innovation hub that’s been taking shape in Lockhart, a city between Austin and San Antonio. It has attracted defense tech startups like Allen Control Systems, which creates drone-destroying robots, and filed plans for a $23 million nuclear research reactor.
“Those are the kinds of things that I think are under-the-radar happening in Austin that are attracting more attention than your typical SaaS company that grew out of the pandemic,” Tenenbaum said.
Lincoln Property Company’s Johnston has a lot riding on the enduring passion for Austin. The firm is set to deliver Waterline, which will be the tallest building in Texas, in Downtown Austin later this year.
He’s confident he’ll be able to fill it up with companies like Apollo, but Austin’s next era isn’t guaranteed until it happens. When asked how long he expects Waterline’s lease-up to take, he laughed: “A crystal ball?”