Report: Texas leading nation in retail real estate construction
Migration to the Lone Star State is driving a retail construction boom.
That’s according to new data from commercial real estate services firm Colliers, which found that between January 2021 and January 2025, Texas recorded a positive net domestic migration of 0.9%. Although construction slowed in 2020 amid pandemic-driven uncertainty, by early 2025, more than 17 million sq. ft. was under construction, with growth fueled by the state’s largest cities of Dallas, Houston, Austin and San Antonio.
Colliers notes that the Texas retail boom contrasts with the national landscape, where construction activity remains historically low. Just 6 million sq. ft. of retail space was delivered nationwide in the second quarter of 2025, bringing total space under construction to 47.9 million sq. ft.
[READ MORE: Commercial construction materials prices up 44.6% since February 2020]
Since 2020, only 21 million sq. ft. of newly built retail has been listed for lease nationally, which is less than 5% of all available space. Notably, nearly one-third of that first-generation space is concentrated in Texas.
Austin
Austin currently leads Texas in overall construction intensity with 2.8% of inventory under construction, compared to 1.5% in Dallas-Fort Worth, which leads in total inventory growth.
The Austin market achieved the highest occupancy among Texas metros at 97.1% in the fourth quarter of last year. Limited construction through the 2010s created today’s demand imbalance, according to Colliers, with consistent net absorption averaging over 2 million sq. ft. annually. The firm says Austin’s fast-growing population at a rate of 2.6%, rising household incomes, and robust consumption continue to garner attention from retailers looking to expand.
Dallas-Fort Worth (DFW)
DFW leads the nation in retail space under construction with 7.2 million sq. ft. in the pipeline as of the third quarter of this year. DFW’s construction boom is driven by its massive economic scale, according to Colliers, with 296,828 businesses, 3.36 million employees, and 8.34 million residents.
Colliers says DFW is a leader for tenant demand, with a robust net absorption averaging around 3.6 million sq. ft. annually, even as headline-making store closures have created the first instance of negative net absorption in over two years.
Houston
Houston, the largest city in Texas, is quickly expanding its population, with 11,000 building permits issued in the first two months of 2025 — more than any other U.S. market. The retail market fundamentals remain healthy, with vacancy rates within the historical 5-6% range, supported by consistent leasing activity, stable rents, and a development pipeline totaling 3.6 million sq. ft.
With competitive land and construction costs, resilient tenant demand, and an evolving mix of uses and experiences, Colliers says Houston remains one of the nation’s most “dynamic and attractive” retail markets.
San Antonio
San Antonio has maintained high retail occupancy, averaging over 96% for consecutive years through cautious development and historically modest construction pipelines, according to Colliers.
In 2025, San Antonio has increased retail construction activity with 1.7 million sq. ft. under construction, representing the most active construction period in recent years. Current occupancy remains tight at 96.3%
