MARKET TRENDS
The Austin Office Space Market Is Booming! For those who live in and around Austin, TX, it is easy to see the rapid growth taking place as there are cranes across the skyline. As demand remains strong, the office market continues to tighten and great office lease deals are becoming harder to find. This Austin Office Market Report newsletter is distributed as a means of informing our clients and commercial real estate tenants about ways to save time and money during the office leasing process.
The Austin office space market has experienced nearly 500,000 square feet of positive absorption this quarter. This is almost double of the absorption in Q1 2015, which means the over 3 million square feet of new Austin office space to be developed by the end of 2015 is already in the process of being readily absorbed.
Due to the ever increasing demand, Austin office space for lease rental rates are hitting an all-time high. The current asking rates are approximately $3 to $4/sf higher now than they were at this time last year. This is mostly due to tech companies flocking to Austin in pursuit of quality talent and lower rental rates than those found in California, New York, and other major tech hubs.
If you are seeking Austin office space for lease, it is in your best interest sign the longest lease that you are comfortable with, while making sure not to pigeonhole yourself for future growth, as asking rental rates are expected to continue to rise faster than the annual rent escalations in your lease.
VACANCY AND RENTAL RATES
High demand for Austin office space continues through 2015 with the citywide office space vacancy rate remaining steady at approximately 10% from last quarter. Rental rates have continued to rise steadily though to an average of $28.22/sf for office space throughout the Austin market, up from $27.27/sf last quarter and $25.64/sf a year ago.
ADDITIONAL INFORMATION
If you are interested in rental rates for a certain location or are seeking Austin office space for lease or purchase, please contact us with your requirement.