Austin Office Report Q3 2018
Lets take a quick snapshot overview of the Austin Office Report for Q3 2018, activity compared to the past couple years is slowing a bit. Vacancies for office space properties have remained in the 9.5-10.5 % range for the 2018 year and moving into Q4 are hovering in at 10.2%. Lease rates on average have moved down a bit but not significantly and are still coming in at over $35 per square foot per year as an all in (Full service gross) rate. Near term the forecast is continued demand and occupancy consistency. Tenants looking to lease office space according to our Austin Office Report should expect operating expenses to be higher overall , recent forecasts show an increase of approximately 0.20 cents per square foot per year. Subleasing activity is an indicator of consolidation and or a potential slowing in the economy, we have seen more office subleases come onto the market in the past quarter. Subleases can provide an advantage to start up companies or businesses that need a shorter term lease, the downside to subleasing is that there are no tenant improvements typically.
Development and Construction
The Austin office report for Q3 2018, does show year to date activity to be slower than previous years. Approximately 200,000 square feet of new construction has commenced in Q3 2018 which brings the current development construction to over 4M square feet of additional space.