Austin and San Antonio are two separate official metros holding 5,434,085 people between them. The roughly 75 minutes of I-35 in the middle—on a good day—is filling in fast.
For small-bay industrial, that does not produce one giant, interchangeable leasing market. It produces something more interesting: a chain of tight local markets with a much larger economic region standing behind them.
Here is the number that reframed it for me. Since 2020, the city of Austin grew 4.6%. Kyle grew 53%.
Those numbers are not merely population trivia. They are market geography catching up with the map.
Buda, Kyle, San Marcos, New Braunfels, Schertz and Cibolo are not empty exits between two distant downtowns. They are growing operating locations with their own households, labor, customers and industrial users. The federal government still places Austin and San Antonio in separate metropolitan areas. A tenant driving service vans along I-35 is less interested in the label.
The finding, in four numbers
- 5,434,085 people lived across the Austin and San Antonio metros in 2025.
- 5,880,142 people are projected by 2030 under the Texas Demographic Center's mid-migration scenario.
- About 446,000 additional residents would be added in five years—roughly 8.2% growth.
- 24.2% growth occurred from 2020 through 2025 across Hays, Comal and Guadalupe counties, the fast-growing middle of the corridor.
The population is the scale. The changing geography is the story.
What do I mean by the Austin–San Antonio megaregion?
For this discussion, the megaregion is the two existing metropolitan statistical areas viewed together: Austin–Round Rock–San Marcos and San Antonio–New Braunfels. They remain separate official metros. Together, however, they form a 13-county region containing about 5.43 million residents.
The corridor is narrower. It is the I-35 chain connecting the two anchors through Buda, Kyle, San Marcos, New Braunfels, Schertz and Cibolo.
TxDOT already plans across the divide. Its Capital–Alamo Connections Study uses its own 12-county planning area, while its I-35 Link Study addresses the approximately 45-mile highway gap between major Austin and San Antonio projects. TxDOT's own language is direct: the regions are becoming increasingly interconnected. Its corridor work projects population and employment in the link-study area at approximately 2.5 times 2020 levels by 2050.
That does not make “megaregion” an official Census designation. It makes it a practical way to describe an economy whose lines are becoming harder to draw.
The population is moving into the middle
Austin crossed 1 million residents in 2025. San Antonio reached roughly 1.55 million. At the metro level, San Antonio–New Braunfels was actually the larger of the two—about 2.81 million people compared with Austin–Round Rock–San Marcos at 2.62 million, a fact that may surprise readers outside Texas. They ranked ninth and sixth nationally for numeric metro growth from 2024 to 2025 and added a combined 92,198 residents in one year, according to the Census Bureau's Vintage 2025 metro estimates.
The more revealing numbers sit between them.
Hays, Comal and Guadalupe counties held approximately 575,000 people at the 2020 estimate base. By 2025, they held nearly 715,000—an increase of about 139,000 residents, or 24.2%, in five years. Those counties are already included in the two metro totals; they are not another 715,000 people to add. They represent about 13% of the combined region and are where a disproportionate share of its growth is landing. The Texas Demographic Center's mid-migration outlook puts them near 795,000 people by 2030.
The city numbers give the same growth a street address. Kyle reached 69,917 residents in 2025, up 53% from its 2020 estimate base. New Braunfels reached 122,492, up 35.5%. San Marcos reached 77,830, up 14.9%, while Cibolo grew about 21%.
This is not simply Austin spilling south or San Antonio spilling north. The middle is becoming large enough to produce its own demand.
Is this the next Dallas–Fort Worth?
The useful answer is not yet—and that is why the comparison matters.
Dallas and Fort Worth did not become one economic region because one city absorbed the other. The space between them filled with jobs, housing, airports, highways and cities that became important in their own right. Arlington, Irving and the Mid-Cities stopped being the gap. They became part of the engine.
The Austin–San Antonio corridor is earlier and more stretched. Its anchor downtowns are farther apart. I-35 congestion is a genuine constraint. The two metros still have distinct employment bases, cultures and real estate markets. At 5.43 million people, their combined population is about 64% of DFW's 8.48 million.
So I would not call Austin–San Antonio “the next DFW” as if the outcome were inevitable. Population alone does not combine labor markets, and the corridor has not erased the differences between its anchors. I would borrow one lesson from DFW: once the middle develops enough gravity, it stops behaving like the edge of two markets and starts behaving like the center of a larger one.
That appears to be happening along I-35 now.
The leasing market is already ignoring the border
The Austin and San Antonio search areas overlap because their drive-time geographies overlap. That does not mean a tenant will consider every suite from Austin to San Antonio. It means the old border is becoming a poor shortcut for the market.
The rent evidence is early but interesting. In SpanVor's August 2026 snapshot, advertised base asking rents for 2,000-to-4,999-square-foot industrial and flex space had medians of:
| Geography | Median advertised ask | Priced offerings | |---|---:|---:| | Austin metro | $16.50/SF/year | 246 | | Schertz | $15.67 | 12 | | New Braunfels | $15.36 | 16 | | San Antonio metro | $13.02 | 184 |
Two cautions matter. These are advertised asks, not executed leases. And 12 priced offerings in Schertz or 16 in New Braunfels is a small, directional sample; one unusual listing can move the result.
New Braunfels and Schertz also sit inside the broader San Antonio metro shown in the table. The point is not to compare independent markets. It is to expose variation hidden inside a metro median. In this snapshot, the corridor cities advertised much closer to Austin's 2,000-to-4,999-square-foot band than the broader San Antonio figure might lead someone to expect.
That may reflect newer product, population growth, limited functional space, proximity to customers, or some combination of all four. The snapshot cannot divide the causes neatly. It can show that the corridor deserves to be underwritten on its own terms.
Why does this matter so much for small-bay and flex?
Because small-bay demand follows the daily operating map.
A large distribution building can serve an enormous region from one location. A local HVAC company, restoration contractor, youth sports operator, auto specialist, food producer, cabinet shop or equipment-repair business lives on shorter trips—to customers, job sites, employees and suppliers.
Every new subdivision creates more roofs, air conditioners, plumbing systems, vehicles, schools, restaurants, gyms and small businesses to maintain them. Those businesses eventually need practical space: a few thousand square feet, loading, power, parking, perhaps a yard, and a location that does not waste the workday in traffic.
That creates several tailwinds for the small-bay sector:
- A broader tenant base. Growth supports far more than contractors: recreation and training users, automotive businesses, local distributors, light manufacturers, food operations, service companies and dozens of other physical businesses.
- More reasons to locate in the middle. A corridor bay can reach expanding customer bases without paying for a central Austin address or sitting deep inside San Antonio.
- More pressure on functional land. The same housing growth that produces customers also consumes land and makes industrial zoning harder to preserve.
- A need for the right product. The corridor does not only need warehouse square footage. It needs divisible suites with useful doors, adequate power, parking for employees and work vehicles, and legal room for the activities tenants actually perform.
The quiet risk is that developers respond to “industrial demand” by building the easiest product to finance: larger boxes. A 200,000-square-foot warehouse may add supply to a market report while doing nothing for a collection of local businesses looking for 3,000 to 8,000 square feet.
Congestion may strengthen the thesis
It sounds contradictory, but a connected megaregion can contain fiercely local leasing markets.
As I-35 gets busier, a small business becomes less willing to serve the entire corridor from one end. That makes nodes more valuable. Buda and Kyle can lean toward south Austin. Schertz and Cibolo can serve northeast San Antonio. San Marcos and New Braunfels can develop their own customer and labor radii.
In other words, congestion may prevent one perfectly interchangeable market while accelerating a chain of strong local ones.
That is especially important for small-bay. The tenant is not asking, “Am I technically inside the Austin MSA?” The tenant is asking, “Can my crews reach the customer, can my employees reach the shop, and can I park the trucks when they get back?”
How should owners, brokers and developers read the corridor?
Stop forcing every bay into an Austin-or-San Antonio bucket.
Instead, look at the corridor as a series of drive-time markets:
- South Austin–Buda: tied closely to Austin's jobs, rents and southward housing growth.
- Kyle–San Marcos: a rapidly expanding household and workforce base with its own service demand.
- New Braunfels: a substantial city at the hinge of the corridor, not merely a halfway marker.
- Schertz–Cibolo: a northeastern San Antonio industrial and residential node with direct I-35 access.
For owners, the relevant competitive set is the suite a tenant can use within a tolerable drive—not every industrial building in either metro. For brokers, market coverage should follow where tenants will actually search. For developers, the opportunity is not “build somewhere between two growing cities.” It is to identify which node lacks the particular combination of suite size, loading, power, parking and yard that its businesses need.
For investors, the comp set is the underwriting. New Braunfels and Schertz may deserve their own rent and replacement-supply analysis rather than a blunt San Antonio average. The other side of that opportunity is thinner leasing evidence: a dozen priced offerings can show a direction, but it cannot carry an acquisition model by itself.
That is a harder question than “is Austin hot?” It is also the one that tells you what to build, where, and what you might pay for it.
Frequently asked
Are Austin and San Antonio officially one metro area?
No. The Census Bureau treats Austin–Round Rock–San Marcos and San Antonio–New Braunfels as separate metropolitan statistical areas. “Megaregion” describes their increasing economic and physical connection, not a new federal boundary.
Is the Austin–San Antonio corridor the next Dallas–Fort Worth?
Not yet, and perhaps not in the same form. DFW is the useful comparison because its middle developed economic gravity of its own. Austin–San Antonio is longer, more constrained by I-35 and still anchored by two distinct markets. The lesson is the role of the middle—not a promise that history repeats exactly.
How many people live in the combined region?
The two metros had a combined estimated population of 5,434,085 in 2025. Austin and San Antonio city proper had approximately 1.00 million and 1.55 million residents, respectively.
How much could the region grow over the next five years?
The Texas Demographic Center's mid-migration projections place the two metros at a combined 5,880,142 residents in 2030—about 446,000 more than the 2025 Census estimate, or roughly 8.2% growth. This combines a Census estimate with a state projection from a different vintage, so it is an outlook rather than a precise countdown.
Why does population growth support small-bay demand?
More households and businesses create demand for local operators that need physical working space near customers and employees. The effect is strongest where functional, properly zoned small suites do not grow as quickly as the population they serve.
A short note on the numbers
Population figures use the Census Bureau's Vintage 2025 estimates. The 2030 outlook uses the Texas Demographic Center's Vintage 2024 mid-migration projections, which it recommends for most purposes. SpanVor's asking-rent observations come from publicly advertised industrial and flex offerings collected August 25–26, 2026. Asking rents are not executed rents, and the leasing snapshot is not a complete census of every available suite.
Key takeaways
- The Austin and San Antonio metros already hold more than 5.4 million people and are projected to approach 5.9 million by 2030.
- Hays, Comal and Guadalupe counties grew a combined 24.2% from 2020 through 2025.
- The corridor is becoming a chain of leasing nodes, not one uniform market.
- Growth and congestion both favor functional small-bay space close to the customers, crews and households each node serves.
Explore the public Austin market profile, San Antonio market profile, and Texas Industrial Data Atlas. For the wider leasing baseline, read Inside the Texas Triangle and The $3,000-a-Month Geography Gap.
The market is already visible at the parcel and corridor level on SpanVor. You can examine it with SpanVor All-Access—no credit card—at spanvor.com/trial.
Written by Jason Probert, Founder of SpanVor—Industrial Property Intelligence.