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Austin Office Market

Average Asking Rent (Price/SF) $33.58
Vacancy Rate (%) 10.3%
Net Absorption (SF) 666,964

Demand for office space in the Austin market has continued to thrive in the second quarter of 2017, producing noteworthy increases in net absorption and rent prices since the first quarter. The city's population, known for its talent, innovation, and entrepreneurship, has remained a draw to prospective tenants looking to relocate. Moreover, the value of real estate and the cost of living have become increasingly attractive among millennials and corporations, ranging from start-ups to Fortune 500s. Although overall vacancy rates grew by 0.02% from the previous quarter, it remains historically low for the capital city. The overall asking rent stood at $33.58/SF, which was up 1.3% quarter-over-quarter and 4.3% year-over-year. Class A rates of $37.38/SF represented a 10.0% premium by comparison.

Austin Industrial Market

Average Asking Rent (Price/SF) $10.72
Vacancy Rate (%) 6.2%
Net Absorption (SF) -116,048

The Austin Industrial market remained uneven through the second quarter of 2017. Market-wide vacancy rates rose slightly from 6.0% in the first quarter to 6.2% at the end of the second quarter. Despite the minimal increase, vacancy rates remained under the five-year average of 7.1%. Only two buildings totaling 64,910 square feet delivered in the quarter, compared with 14 buildings totaling 1.1 million square feet in the previous quarter. More positively, average asking rent increased to $10.72 per square foot, an all-time record. Additionally, the amount of construction jumped from 1.4 million square feet in the first quarter to 2.0 million square feet in the second quarter. Amazon's recent $13.7 billion acquisition of Whole Foods could bring changes to conventional grocery shopping that increase demand for warehousing and distribution space. However, with such a large acquisition, this type of change will not be seen in the near future. In the meantime, Austin's industrial market will pick up as buildings deliver and tenants move in over the next two quarters.

Austin Office Market Report
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Austin Industrial Market Report
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