Download the Q1 2026 Austin Office Market Report
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Executive Summary
Austin’s office market entered 2026 with improving momentum, supported by stronger leasing activity and stabilizing demand. Net absorption remained negative at –87,955 SF but improved significantly from prior quarters, while vacancy declined to 17.5% and rents held steady at $31.56 PSF. Sublease availability also continued to contract (down 112,328 SF), signaling steady progress in absorbing excess space and a market regaining its footing.
Leasing activity in Austin is tracking with broader national trends, with Q1 2026 marking the strongest quarter since before the pandemic. Locally, notable deals such as NXP Semiconductors (225K SF) and xAI (112K SF), along with a steady flow of mid-sized leases, highlight growing tenant activity and confidence.
On the supply side, 1.78 million square feet remains under construction, a modest increase from 1.51 million square feet last quarter, with no new deliveries in Q1—providing the market additional time to absorb existing availability. While a 9.0 million-square-foot proposed pipeline remains on the horizon, much of it is expected to be phased in over time, allowing demand to continue catching up with supply.
Overall, the Q1 2026 Austin office market reflects a steadily improving landscape. Strengthening leasing activity, continued reductions in sublease availability, and moderating absorption trends point to a market that is gaining traction. While vacancy remains elevated, the trajectory of key figures supports a more optimistic outlook as Austin continues to gain momentum.
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Submarket Spotlight: Northwest Austin
Northwest Austin’s Class A vacancy dropped from 35.7% to 16.9% in a single quarter — and the story isn’t just vacancy filling back in. The corridor is attracting a fundamentally different type of tenant.
NXP Semiconductors signed the quarter’s largest Austin lease (225,000 SF at Champion Office) while simultaneously listing its 155-acre HQ campus for sale — an 85% reduction in physical footprint. What they kept was their people in Northwest Austin. At Highpoint 2222, SB Energy acquired the former 3M campus and filed for $610M in electrical infrastructure upgrades, with Arm Holdings reportedly circling as a tenant.
