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Q1 2017 | Austin Office | Market Report

The Austin office market saw a continued “leveling out” of both activity and rates in the first quarter of 2017. The average vacancy rates increased to 11.4% from 11.1%, fueled in part by new construction delivering with vacancy. Despite the additional space, and a slight rise to vacancy rates, gross asking rents ticked slightly upward from $33.17 to $33.25. Landlords and the money behind them clearly remain bullish on commercial real estate in Austin.

Our local experts continue to see a significant level of sublease space hitting the market as companies right-size and continue to position themselves in less heavy traffic corridors (i.e. a flight to the core or to a specific location central to existing workforce). Of the nearly 800,000 SF of office space currently listed for sublease, approximately 440,000 SF is located in the Southwest submarket.

Q1 2017 Highlights

  



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Austin Office Market Indicators


 Q4 
2016

Q1
2017


VACANCY RATE 11.1%
11.4% 
 
NET ABSORPTION
(Million Square Feet)
.062
-.092

NEW CONSTRUCTION
(Million Square Feet)
.103
.842

UNDER CONSTRUCTION
(Million Square Feet)
2.190
2.817


CLASS A VACANCY RATE

 
     CBD 6.0%
7.3% 

     SUBURBAN 12.7%
11.7% 

GROSS ASKING RENTS
(Per Square Foot Per Year)
 
 
     AVERAGE $33.17
$33.25

     CBD CLASS A $50.71
$48.63   
     SUBURBAN CLASS A $34.26
$34.41   


Job Growth & Unemployment (Not Seasonally Adjusted)

UNEMPLOYMENT 2/16 2/17
Austin 3.0% 3.7%
Texas 4.6% 4.9%
U.S. 4.9% 4.7%
JOB
GROWTH
ANNUAL CHANGE # OF JOBS ADDED
Austin 2.8% 27.4K
Texas 1.8% 218.8K
U.S. 1.7% 2.36M

Texas