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Executive Summary
Austin’s office market strengthened further in Q2 2026. Vacancy fell to 17.30% (from 17.50% in Q1 2026 and 18.30% a year ago), rents rose to $31.91 PSF (from $31.56), and net absorption turned positive at 595,435 SF, reversing the –176,135 SF loss recorded in Q2 2025.
Leasing stayed healthy, led by the Capital Area Council of Governments’ 52,650 SF lease at Monterey Oaks, while sublease space continued to shrink, down to 2,895,925 SF from 4,488,193 SF a year earlier. The quarter’s biggest headline was Apollo Global Management’s announcement of a second Austin headquarters.
On the supply side, 419,198 SF was delivered (led by Apple’s Capstone Phase Two AC03), under-construction inventory dropped to 1,043,983 SF (down 731,761 SF), and the proposed pipeline stands at 7,761,203 SF, giving demand room to keep catching up with supply. Backed by a resilient local economy—the Business-Cycle Index grew an annualized 4.8% and employment rose 2.8%—Austin’s office market enters the second half of 2026 on its strongest footing since before the pandemic.
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The Owner-User Purchase: A Deep Dive into a Growing Phenomenon
This quarter’s investment sales carried a clear throughline: owner-occupier acquisitions are becoming increasingly prevalent in Austin. Of this quarter’s notable sales, three went to owner-users. Austin Community College’s $130.5 million purchase of Bergstrom Tech Center (560,381 SF), Zoho Corporation’s purchase of 3100 Alvin Devane Blvd (70,388 SF), and Great Hills Baptist Church’s purchase of Highflex (71,247 SF). Add Apple’s owner-occupied Capstone Phase Two AC03 (369,461 SF), delivered this quarter, and owner-users accounted for more square footage than at any point in recent memory.
Every one of those buildings exits the leasing pool for good. This flattens vacancy, absorption, and sublease numbers without a single lease being signed. For example, last quarter, SB Energy’s 1.2 million-SF purchase of Highpoint 2222 dropped Northwest Austin vacancy by 11 points overnight. So how much of Austin’s “recovery” reflects buildings leaving circulation rather than tenants filling space? Less than the raw numbers suggest, as this quarter’s healthy leasing activity and positive absorption show real demand showing up alongside the owner-user wave, not instead of it.
