Austin Office Market Q1 2018

Austin Office Market Q1 2018  | Summary and Report

Austin’s office market is staying within a specific lease rate range with some major increases in certain sub-markets based on our vacancy reporting. Vacancy has increased to close to 10% coming up from the 8% range in the last quarter for 2017.  2017 came in at a 16 year low for vacancies at 8.8%.   Lots of new development are still being constructed with forecasts telling us an additional 700,000SF of new office projects within the Austin Market.

OPEX Costs  (NNN) and Office Market movement

Operational costs are still on the up-rise averaging an up tick of $0.17 per square foot per month. Office market movement in Austin for Class A still remains robust with increased leasing rates especially in Downtown Austin.  Full service gross leasing rates for Class B offices are coming in at just under $35 per square foot per year which is a new high for the Austin office market. Austin employment is still moving up going into the 2nd quarter of 2018.

Lease Rate Comparisons across various sub-markets

Austin Commercial Office Space for Lease 5,000-10,0000+SF

Downtown Austin in 2012 : $36.08 per square foot  compared to 2018 $46.57 per square foot per year

Northwest Austin in 2012: $25.83 per square foot compared to 2018 $35.25 per square foot per year

Round Rock TX  in 2012:  $21.00 per square foot compared to 2018 $24.00 per square foot per year

Southwest Austin in 2012: $26.80 per square foot compared to 2018 $35.29 per square foot per year