Austin Commercial Buildings
Summary of Austin’s commercial buildings and activity for 2017 (portions obtained from Co-Star )
Austin is going thru expansions for commercial buildings especially in the Downtown area. Austin’s downtown commercial building leasing rates are up +30% compared with per-recession lows. Vacancies remain low as well with only approx 25,000SF of space avail for lease south of the Capitol building. Pre-leasing activity remains strong for commercial buildings most of the new construction buildings deliver leased. Over 2M square feet has been delivered to the Austin market since 2012.
Sales of Austin commercial buildings have hit highs , as high as $665 per square foot at a 5.9 cap rate. The specific Austin commercial building that sold for these numbers had new construction going for it as well as the average remaining lease terms were about 6 years and were to high credit tenants.
Unemployment rates in Austin stay Low
Another key factor is the robust population growth and how unemployment in the Austin area , for Q2 it hovered around 3.3% and moving into July of 2017, unemployment went below 3% . Business expansion was up to 5.7% . Key transportation issues and affordability has cropped up in the Austin area as it continues to grow. Vacancy rates have fallen to lows of not seen since the 2nd quarter of 2001. For new construction moving into the third quarter, the sub-markets that saw the highest delivered new construction were East and Northwest Austin.