Austin Office Market
Annual full-service class rental rates remain elevated at $41.12/SF, a 1.8% increase year over year. Occupancy declined, causing overall vacancy rates to increase by 420 basis points year over year, to 22.2%. The under-construction pipeline dropped slightly to 4.7 MSF currently in progress. Total leasing activity closed the quarter at 994,928 SF, well below the 16-year fourth-quarter average of 1.7 MSF.
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Austin Industrial Market
The market realized 1.2 MSF of positive absorption in the fourth quarter of 2023, bringing year-to-date totals to 4.4 MSF. Overall rental rates grew 10.3% year over year to $14.16/SF, reaching a new historical high. The construction pipeline recorded deliveries of 3.6 MSF in the fourth quarter of 2023, with a record 19.9 MSF under construction. Following yearly supply outpacing demand, vacancy increased by 540 basis points year over year to 9.8%.
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