San Marcos Proposal Reflects Growth Trends in Austin Commercial Real Estate

Development at a Glance

Austin commercial real estate continues to evolve with the proposal of a major new 100-acre, mixed-use development in San Marcos. If approved, this development could become one of the city’s most significant projects to date. With a projected assessed value of $557 million at full buildout, the development would be completed in three phases through 2031, according to city documents.

The project is currently under review and pending city approval. If it moves forward, it would add substantial residential, commercial, and hospitality space on the east side of San Marcos — reflecting the region’s rapid transformation and growing strategic value within the broader Austin commercial real estate landscape.

 

Project Details

• Location: McCarty Lane & I-35, east San Marcos

• Size: ~100 acres

• Estimated Value at Full Buildout: $557 million

• Timeline: Built in 3 phases through 2031

• Planned Land Uses (per zoning applications):

  • Indoor/outdoor entertainment

  • Commercial, retail, and restaurant

  • Hotel and office space

  • Multiple residential types (including multifamily and BTR)

• Current Status:

  • San Marcos City Council to consider zoning changes and Public Improvement District (PID) creation on Sept. 2

  • PID would allow for up to $60 million in infrastructure bonds

  • City also negotiating a Chapter 380 tax incentive agreement

  • No finalized incentive terms yet released

 

What It Signals About Commercial Real Estate Growth in Austin Region

This proposal reflects several larger trends shaping commercial real estate in Central Texas, including:

• Population growth pushing development beyond the Austin core

• Increased infrastructure investment along the I-35 corridor

• Expanding interest in walkable, mixed-use communities

• Continued demand for commercial property for lease, retail hubs, and flexible office space in secondary markets like San Marcos

American Ventures noted strong community interest in live-work-play environments during the early incentive discussions. If approved, this project would further define how commercial development is evolving outside of Austin’s traditional urban boundaries.

 

Economic Impact (Projected)

According to city documents, the proposed development could generate:

• $145.5 million in property, sales, and hotel taxes for the City of San Marcos

• $66.1 million in sales and property taxes for Hays County

• Net of any incentives provided

While full amenities are still unspecified, the project is expected to include a blend of entertainment, retail, hospitality, and residential uses that align with the city’s shifting growth patterns.

 

Context & Competitive Landscape

San Marcos — home to Texas State University, a population of nearly 75,000, and a growing tourism sector — continues to attract interest from developers across asset classes. The city has already become a target for data centers, industrial real estate, grocery chains, and entertainment concepts.

With this proposal, American Ventures joins several firms aiming to redefine east San Marcos as a viable commercial and residential hub.

Note: American Ventures is also working on a separate 60-acre mixed-use project in Elgin, which could include up to 350,000 sq. ft. of retail and a hotel, further underscoring their regional investment strategy.

 

Austin CRE Outlook: Why This Project Deserves Attention

The San Marcos proposal illustrates just how dynamic Austin commercial real estate has become. As population growth continues to shift investment patterns, secondary markets like San Marcos and Elgin are no longer on the periphery—they’re becoming essential to long-term regional development strategies.

Lee & Associates will continue monitoring projects like this to help our clients anticipate opportunity, navigate complexity, and make informed decisions.

 

Source & Further Reading

For more details on the proposed development and city negotiations, read the original article from the Austin Business Journal:  Read the ABJ Article