Austin Office Market | End of Year 2018
During the first half of 2018, the Austin office market was relatively flat. Towards the end of 2018, the office market actually made a rebound. Austin vacancy rates did go below 10% , lower vacancies translates to higher lease rates. New construction commenced for the office market in 2018 due to the steady demand. For 5 straight years Austin’s office market has had over 1M square feet of space occupied.
- Vacancy rates: Q3 10.2% , Q4 9.6% (Austin Metro Area)
- Highest vacancies for Q4 2018: Round Rock , Northeast and Southeast Austin
Impact on Expenses for the Office Market and Lease Rate
The Office market will see continued pressure on expenses moving into the near future. There was a $0.20 cent plus increase in expenses from the third quarter of 2018 moving into the fourth quarter of 2018. Tenant demand remains solid moving into 2019 with forecasts calling for over 8 million square feet of demand. Lease rates for office space moved upward to $36.00 gross per square foot per year. Gross rates are defined as the base lease rate plus NNN expenses included. Demand consisted of other types of businesses followed by technology type companies.