Market Trends
Office space demand remains high and vacancies dwindle
The Austin office space market has continued to boom throughout 2016. Thankfully Texas as a whole is doing well, even with the current oil slump. According to the Texas Workforce Commission, the State of Texas has added over 170,000 jobs in the past year.
With the increasing demand for Austin office space, the tight leasing market makes great office lease deals hard to find. This 3rd Quarter Austin Office Market Report newsletter is distributed as a means of informing our clients and commercial tenants about ways to save time and money during the office leasing process.
The Austin office space market has absorbed over 630,000 square feet of office space since last quarter. The Southwest Austin office space submarket recorded the most absorption, with a total of over 155,000 square feet of office space being absorbed. Due to the ever increasing demand, rental rates for Austin office space have been steadily increasing higher. The current asking rates are now over 4% higher than they were at this time last year.
If you are seeking Austin office space for lease, it may be in your best interest to sign the longest lease term which you are comfortable with. Market rental rates have been rising faster than the annual rent escalations found in most leases. This trend is expected to continue as the city continues to grow. You’ll want to be sure to not limit your future growth plans though.
Vacancy and Rental Rates
High demand for Austin office space has continued through 2016. The citywide office space vacancy rate has remained low at 9.2%, which is a major drop from 10.5% at this time last year. Office space rental rates remain high at an average of $34.09/sf for office space throughout the Austin market. This is slightly down from an average $34.79/sf last quarter but still significantly higher than the $32.72/sf twelve months ago.
Additional Information: Austin Office Market Report Q3 2016
If you are interested in rental rates for a certain location or are seeking Austin office space for lease, please contact us with your requirement.
Information in this Austin Office Market Report Q3 2016 has been obtained from sources deemed reliable. While considered accurate, we make no guarantee, warranty, or representation about it.