MARKET TRENDS
2014 has proven to be another great year of rapid growth and development for Austin, TX. The Austin skyline has gained several new office towers which will soon be ready for occupancy, such as Colorado Tower and 311 Bowie.
Tech companies continue to aggressively pursue office space throughout Austin, and Google Fiber will soon be offering insanely fast internet speeds to the Austin office space users. The Austin office market has experienced over 337,000 sf of positive absorption this quarter; which continues to spur the development of approximately 3 million square feet of new Austin office space by the end of 2015.
Due to the unprecedented demand by office tenants, the Austin office space market continues to remain in favor of the landlord. Three and five year leases are often the minimum lease term which a landlord will allow and rapid expansion continues to be the name of the game for Austin office tenants. Leasing activity has remained strong throughout the city, with Class A buildings in Northwest Austin and Downtown Austin remaining very popular.
VACANCY AND RENTAL RATES
As the Austin office space market remains tight with high demand, the citywide office space vacancy rate has decreased to 8.9% from 11.5% a year ago. Rental rates thus have continued to rise to an average of $26.09/sf for office space throughout the Austin office market, up $24.32/sf/yr from last quarter. Downtown and NW Austin office space continue to have the highest average rental rates.
ADDITIONAL INFORMATION
For more information on Austin office space market trends, current available office space for lease or purchase, or to sign up for the Austin Office Report quarterly newsletter, please contact us directly.