Austin Office Market
The Austin office market has been on such a tear in recent years, with four of the past five years recording over 1.0 million square feet in net absorption, that some leveling out should come as no surprise. Sure enough, absorption turned negative in the first quarter of 2017, pushing overall vacancy to 10.2%, up from 9.8% at the end of 2016. However, vacancy remains low by historical standards-well below its five-year average of 11.8% and 10-year average of 14.1%, for example. Furthermore, asking rents continued to move higher, even though the pace of growth is clearly slowing. The overall asking rent stood at $33.28/SF, which was up 0.8% quarter-over-quarter and 4.0% year-over-year.
Austin Industrial Market
The Austin industrial market paused in the first quarter of 2017, which ended with a citywide vacancy rate of 6.1%. Although somewhat softened compared with 5.2% last quarter and 4.9% a year ago, the vacancy rate remains well below the five-year average of 7.1%. The quarterly slowdown was a result of sluggish demand and a surge of first-quarter deliveries. Specifically, 14 buildings representing 1,088,077 square feet were delivered, which in turn impacted the vacancy rate. The largest concentration of first-quarter deliveries took place in the East submarket, which added two buildings totaling 517,880 square feet; however, the Capitol Wright Distribution Center located at 10095 U.S. Highway 290 East accounted for 500,000 square feet of it.