Austin Office Market
The Austin office market has been on a tear. Net absorption totaled 1,071,573 rentable square feet in 2016, marking the fourth time out of the previous five years that absorption has exceeded the 1.0 million-square-foot threshold. As a result, overall vacancy declined to 9.8% compared with 10.4% a year ago. Furthermore, this is the first time that overall vacancy has fallen to single digits since the first quarter of 2001. By property classification, Class C buildings, the smallest segment of the market, maintained the lowest vacancy relative to the more expensive Class A and Class B product. Overall, while demand in 2016 was healthy, it was less robust than in 2015, suggesting the technology leasing cycle is tapping the brakes.
Austin Industrial Market
The Austin industrial market continued its strong performance through the fourth quarter of 2016, which ended with a citywide vacancy rate of 5.2%. Although somewhat softened compared with 4.6% last quarter and 4.9% recorded in the same quarter a year ago, the vacancy rate remains well below the five-year average of 7.4%. Recent deliveries impacted the vacancy rate, as 48,125 square feet at 955 County Road and 57,600 square feet at 7701 Metropolis Drive, Building 13 came online in fourth-quarter 2016. Crystal Park, Building D in Round Rock returned 39,880 square feet to the market, in addition to 51,300 square feet that was vacated at 201 West Howard Lane in Northeast Austin and 45,900 square feet that was given back at 15877 Long Vista Drive in Vista Park 4 in the North submarket.