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Office Market Insight

Austin Q3 Market Stats

$46.13
Avg. Gross Rent
16.4%
Vacancy Rate
630K
SF Delivered
6.2M
SF Under Construction

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Austin is Putting Workers in Desks

When looking at the state of the office, there are two different pictures. At the national level, there are still many empty desks. Estimates put 60% of global office employees at home in September 2021, because of the pandemic. However, when looking at Texas and Austin specifically, we get a different picture; “Austin led the country in workers at their desks in September, with just under half of employees back in the office.” Austin’s office numbers are a stark contrast to San Francisco, where only 21% of workers are currently in office. Austin’s sentiment towards the office is a case study for the rest of the nation.

Office usage could become yet another tip of the hat for companies moving to Texas. There has been a tremendous influx of companies relocating their headquarters to Texas, and one of the reasons is the warmth towards the office. Just recently, Tesla announced it would be relocating to Austin. Yet another notable company moving to Austin. Looking forward, Austin will continue to garner national attention if other states remain vacant from their offices. States reluctant to go back into the office may cause an acceleration of relocations to places like Austin, where it has advantages in areas like taxes, regulations, and cost of living.

As the office market returns to normal, Austin continues to mint deals as many large tech companies build their own offices, buy offices buildings, and lease Class A spaces. To keep up with the scorching demand for the Austin office market, developers are rapidly building, with around 6 million square feet currently under construction and over 23 million square feet proposed. Larger tech companies are also drawing in smaller companies as Austin has seen eye-popping job growth exiting the pandemic. “Through September, more than 150 companies announced the addition of 20,840 jobs in the area, according to data from the Greater Austin Chamber of Commerce. That included more than 5,500 jobs from roughly 50 companies during June, July, and August. The 20,840 announced jobs represented 94% of last year’s record of 22,114 jobs announced by companies relocating to or expanding in Austin.”

Austin continues to prove that it is the place for business. Companies relocating here left and right, the housing market exploding, and rapid job growth. Even the office, uncertain at the height of the pandemic, fought its way back in the capital city of Texas.

Austin Sublease Activity

Quarter Class A Office Class B Office Class C Office Total
2016 Q2

864533

480796 60113 1405442
2016 Q3 899632 467834 38118 1405584
2016 Q4 856643 439641 34746 1331030
2017 Q1 909176 561556 25547 1496279
2017 Q2 952435 456450 28108 1436993
2017 Q3 850486 444043 45576 1340105
2017 Q4 1005713 480616 24850 1511179
2018 Q1 1114427 465834 22831 1603092
2018 Q2 1135173 703671 27356 1866200
2018 Q3 1158644 596011 62841 1817496
2018 Q4 1025760 685090 51813 1762663
2019 Q1 959386 616030 32816 1608232
2019 Q2 907874 659263 19732 1586869
2019 Q3 641646 632070 27772 1301488
2019 Q4 943674 657355 20145 1621174
2020 Q1 1293038 699123 20254 2012415
2020 Q2 1912374 808228 35809 2756411
2020 Q3 2295295 946767 44659 3286721
2020 Q4 3024439 1070789 48013 4143241
2021 Q1 2905258 1016242 59778 3985265
2021 Q2 2067050 823289 51786 2942421
2021 Q3 1760065 731252 38713 2530284

Austin In the News

Apple Buys Austin Office Building on Capital of Texas Highway August 2021 ABJ $180 Million Project Envisioned for Hill's Cafe Site in South Austin September 2021 Statesman Texas TRS to Spend up to $300M on New HQ After Scrapping Indeed Tower Plans September 2021 Statesman Downtown Austin's Indeed Tower Being Sold for $580 Million July 2021 KVUE

 

Austin Q3 2021 Development Pipeline

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Austin Submarket Map

 

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