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Office Market Insight

Austin Q1 2025 Market Stats

$30.19
Avg. NNN Rent
18.7%
Vacancy Rate
250K
SF Delivered
2.7M
SF Under Construction

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SXSW’s Impact on Austin’s Tech Industry and Office Market

Every March, traffic slows as South by Southwest (SXSW) transforms Austin. The festival has played a pivotal role in shaping Austin’s tech industry, influencing the city’s reputation as an innovation hub and, by extension, its office leasing trends long after those two weeks in mid-March. Since the festival expanded beyond music into interactive media and technology in 1994, it has become a global stage for startups, venture capitalists, and major tech firms looking to showcase new products, network, and establish a presence in Austin. This annual influx of tech talent and investment has contributed to long-term job growth, company relocations, and increased demand for office space.

How SXSW Has Helped Shape Office Leasing Trends

Tech Players of All Sizes Line Up To Play

While the big players like Google and Meta host some of the most extensive activations in the city, they’re not the only ones. Companies like Fast Company, Inc. Founders House, and Capital Factory provide a playing field, allowing smaller, scrappier startups to showcase what they’re made of. The model works to provide a launching pad to the latest iteration of tech startups in Austin, as seen by Ninjaone’s recent 60,033 SF lease in 301 Congress Ave.

Flight to Quality & Creative Office Space

As a festival celebrating creativity and innovation, SXSW has influenced the preference for unique, highly amenitized office spaces over traditional corporate environments. The demand for open floor plans, collaborative lounges, and high-design interiors has grown as companies seek to have a well-talked-about activation and attract long-term talent. Properties with hosting capabilities like Hannig Row and 2921 E 17th St allow tenants to capitalize on SXSW’s influx of eyeballs.

Startup Growth & VC Investment

SXSW has been a launchpad for major startups, with companies like Twitter (2007) and Foursquare (2009) making their mark at the festival. The influx of venture capital funding during and after SXSW has fueled office demand from startups looking for scalable, high-energy environments in locations like 3000 E Cesar Chavez in East Austin.

SXSW’s Long-Term Impact on Office Space in Austin

While SXSW lasts only a few weeks each year, its economic and cultural impact lingers, as seen by the $377.3 million economic impact the festival brought last year. Austin’s steady tech sector expansion (65% of CBD and Domain leases this quarter) and the city’s position as a leading destination for innovation. As tech companies shift toward smaller, highly curated office footprints, SXSW has reinforced the trend of flexibility, high-quality design, and central locations, ensuring that office leasing continues to adapt to the evolving needs of the industry.

Austin Sublease Activity

Quarter Class A Office Class B Office Class C Office Total
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
2021 Q4 1889479 845798 45870 2781147
2022 Q1 1468352 909732 51755 2429840
2022 Q2 1905530 888513 30219 2824263
2022 Q3 2536072 1265781 28336 3829191
2022 Q4 3331840 1437075 32726 4812712
2023 Q1 3898586 1450787 39880 5389254
2023 Q2 4436146 1478106 34539 5948791
2024 Q3 4772705 1546187 15571 6334463
2024 Q1 4119632 1334443 57875 5511950
2024 Q2 4034107 1260450 53194 5347751
2024 Q3 3949636 1223218 70257 5243111
2024 Q4 3810341 1245689 55341 3991371
2025 Q1 3383819 1158424 47323 4589566

Austin In the News

The District in Round Rock Breaks Ground February 2025 Connect CRE West Campus Could Get Taller High-Rises February 2025 ABJ Realtor.com Relocates HQ to Austin From California February 2025 ABJ SXSW’s Impact on Austin’s Tech Industry and Office Market March 2025 ECR

 

Austin Submarket Map

 

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