Commercial Office Space Austin | Summer 2019
Austin’s commercial office space market for the summer of 2019 equals 2 words, higher rates! Current lease rates for commercial office space have hit all time highs in the Austin area. Vacancy rates are down now below 10%.
Lower vacancies and positive occupancy have pushed lease rates up to a historic high, overall construction is up currently for office properties. The lease rate quoted above is for a full service rate which includes all expenses, electric and janitorial costs. Although leasing rates have increased, they did not increase as much as they did the previous quarter.
- Operational costs have increased as well up $0.10 from the first quarter of 2019.
Commercial Office Space Terms
Commercial office space terms are typically 3-5 years. As far as costs go most multi-tenant buildings have a “FSG” full service gross lease quoted. Outside of that tenants may be looking at a NNN lease which has a base lease rate plus operating expenses added onto the lease rate and it does not cover electric or janitorial costs.
Expect TI finish out concessions to go in line with longer lease terms , short lease terms less than 3 yrs typically do not have leverage to negotiate finish out in the tenant’s favor. Your credit should be good to excellent if you want to lease a Class A or B Building in Austin. Because we track lower lease rate deals, you can find these on our website page under “Office Deals“. We do not project much change near term for the next quarter of 2019.