Austin Office Report publishes a quarterly newsletter to keep you updated on all things office space in and around Austin, TX. To receive the Austin Office Market Report quarterly newsletter by email, please contact us or enter your email address in the “Sign up for my Quarterly Newsletter” box.
Office Rates Rise as Austin’s Growth Continues
2015 has proven to be an incredible year for the Austin office space market. Over 2.5 million square feet of new Austin office space has been developed this year, most of which was pre-leased prior to completion. As demand for Austin office space remains strong, the tight office market makes great lease deals hard 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.
This quarter the Austin office space market has experienced over 700,000 square feet of positive absorption. This amount has nearly tripled in the last 3 months. With the ever increasing demand, Austin office space for lease rental rates have been steadily increasing to new all-time highs. The current asking rates are approximately $3/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 term which you are comfortable with, while making sure not to limit your potential growth plans. Market rental rates have been rising faster than the annual rent escalations found in a lease, this trend is expected to continue.
VACANCY AND RENTAL RATES
High demand for Austin office space has continued through 2015 with the citywide office space vacancy rate remaining steady at 9.5% from last quarter. Rental rates have continued to rise steadily though to an average of $29.67/sf for office space throughout the Austin market, up from $28.99/sf last quarter and $26.91/sf a year ago.