Dallas, TX vs. Austin, TX: Which Is Better for Businesses?

Published: 05-17-2022  Category: General CRE

The great state of Texas is home to many dynamic, fast-growing cities, but which is the better city for businesses and their employees?

That’s a question that many business owners must answer when deciding where to set up shop. Both Dallas and Austin are known as great places to live and launch a business.

Each has its own unique charms, but they also have competing pros and cons when it comes to launching a new company.

To help you make an informed decision about your future business location, we’ve outlined the key differences between living and launching a business in Dallas vs. Austin.

Population Comparisons

As the 10th-largest city in the U.S., Austin boasts a population of over 1 million residents and an annual job growth rate of 9.4%.

Dallas, meanwhile, has a population of over 1.3 million residents and an annual job growth rate of 7.4%.

Here are some key population statistics to know.

Average Demographics

In Dallas, the population demographics in 2022 were:

  • Median age 32.5 years old.
  • 50.4% of the population is female.
  • 18.4% of the population is between the ages of 25 to 34.
  • 29.1% of the population identifies as White.
  • 24% of the population identifies as Black.
  • 41.7% of the population identifies as Hispanic.

In Austin, the population demographics in 2022 were:

  • Median age 23.7 years old.
  • 50.6% of the population is male.
  • 22.2% of the population is between the ages of 25 to 34.
  • 48.6% of the population identifies as White.
  • 7.3% of the population identifies as Black.
  • 34.5% of the population identifies as Hispanic.

Austin and Dallas are fairly similar in terms of population demographics. While Dallas, Texas is more diverse than Austin, there are still many similarities.

Average Household Income

The median household income in Austin is $80,954.

The median household income in Dallas is $54,747.

Commercial Real Estate Comparisons

While Dallas and Austin have a lot in common in terms of demographics, the cost of living and renting commercial space varies drastically between the two.

Average Commercial Rents

The average cost of commercial rent in Dallas is:

  • Class A Office Space: $34.58 per square foot.
  • Class B Office Space: $22.93 per square foot.
  • Class C Office Space: $13.83 per square foot.

The average cost of commercial rent in Austin is:

  • Class A Office Space: $52.13 per square foot.
  • Class B Office Space: $34.53 per square foot.
  • Class C Office Space: $28.21 per square foot.

It is generally much more expensive to rent commercial real estate in Austin than it is to rent commercial real estate in Dallas.

Commercial Vacancy Rates

The commercial vacancy rate in Dallas is 20.68%.

The commercial vacancy rate in Austin is 10.80%.

In terms of commercial real estate availability, Austin is a more competitive market.

CRE Market Outlook for 2022

Both Dallas and Austin have seen steady increases in population and job growth over the past seven years, but Austin has experienced greater job growth than Dallas, even though both are above the national average.

The CRE market outlook for 2022 projects that Austin will add thousands of new jobs, while Dallas will not see as large of an increase in its employment.

Both cities are major hubs for business activity.

Commercial Activity Comparisons

Commercial activity in both cities is booming. Many people move to these areas for high-paying jobs in technology, healthcare, and energy.

Businesses have flocked to the city from all across the U.S., making it one of the largest job centers in the country.

Here are some brief comparisons of different commercial real estate sectors in Dallas and Austin:

Retail: In-Person Shopping

With a population of over 1 million residents, Austin is a large market for in-person shopping.

There are even multiple high-end shopping centers in the city. The average household income in Austin is also higher than the national average.

This makes it an attractive option for local merchants and chain stores.

In Dallas, there are many strip malls and shopping centers with anchor stores such as Target and Wal-Mart. Smaller, local businesses thrive in the city due to the high number of in-person shoppers.

For online shopping, Austin has a large market share. The average household income is slightly lower than the national average, but there are many households with lower incomes, too.

Austin also has a large student population.

Dallas has an above-average market share for online shoppers due to its high concentration of young professionals and students.

Industrial: Warehouse Storage Activity

Warehouses are vital to the success of many large businesses.

The greater the warehouse availability, the more likely a company that needs warehouse space is to launch or relocate to a city.

Both Austin and Dallas have seen steady increases in warehouse activity over the last seven years.

However, many of the existing warehouse facilities are occupied in both cities.

Office: Office Space Activity

In Texas, there is a large amount of office space, making these markets prime for commercial real estate acquisitions.

Because Austin and Dallas are already major business hubs, there is plenty of new office space being built in the area.

Multifamily: Vacancy Rates & Leasing Activity

Austin and Dallas are major markets for multifamily properties.

There are several large apartment complexes in both cities, many with amenities like swimming pools and fitness centers, that cater largely to college students.

Both cities have high-rise commercial and residential towers at the high end of the market.

Deciding Which Location Is Right for Your Business

The cities of Dallas and Austin are both dynamic and thriving, so it can be hard to choose between them.

If you decide to relocate your business to one of these cities, make sure to consider each city in relation to the other.

When it comes to commercial real estate, Dallas is a more affordable option for both office and retail space when compared to Austin.

However, affordability is just one factor to consider.

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