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Office Market Insight

Austin Q4 Market Stats

Avg. Gross Rent
Vacancy Rate
SF Delivered
SF Under Construction

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Office Market Outlook

At the end of 2022, as interest rates climbed and the prediction of a recession loomed, shifting market conditions have resulted in increased vacancy and sublease levels. During this time, many technology companies enacted hiring freezes, layoffs, and engaged in efforts to reduce their real estate footprint and shed underutilized office space. For instance, tech giant, Meta announced their plans to sublease the 589,000 square feet at Sixth and Guadalupe and eliminate 222 positions in the Austin area. In a report analyzing sublease space on the market, 44.2% of sublease space in Austin has been given back by the tech sector. 

Within the office sector, we are also seeing the persistence of remote work, resulting in 15% less office use on a per-employee basis for the foreseeable future. Before the pandemic, when calculating space requirements, you’d need 150-200 square feet per employee. Now, employers are shifting away from that perspective and preferring a more collaborative design with amenities aimed at the return of in-person work. This trend has led to the “flight-to-quality” movement, as many companies are opting for amenity-rich higher quality spaces. As a result of this trend, experts predict the vacancy gap between newer and older offices will widen. Vacancies for office space built in the 2010’s continued to fall over the past decade to a low of roughly 7% in the third quarter of 2022, while vacancies in older buildings have continued to rise. 

Austin has seen the sixth-highest increase in space up for sublease since the third quarter in 2019 (+201%). As we may fear the obvious surge in sublease space, we should also look at how a slowdown could positively affect our market and where we might see the light at the end of the tunnel. Despite the large amount of sublease availability, there’s still a strong demand for office space in Austin from companies looking to relocate, expand, and renew. There’s a unique opportunity for companies looking to lease space at a competitive rate with shorter lease commitments. Also, amid the fears, Austin employment percentages have shown positive net growth. According to the Bureau of Labor Statistics employment in metro Austin has increased 5.4% year-over-year compared to the nationwide job growth of 3.7% over the same period. 

As we head into 2023, we know that it’s hard to predict what the rest of the year holds. But while the region as a whole may not be completely insulated from any challenges, Austin is in a solid position to be able to continue to outperform many other parts of the county. We’re still seeing continued job growth, low unemployment rates, and business relocation demand, which will carry on throughout the year. 

Austin Sublease Activity

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


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
2021 Q4 1889479 845798 45870 2781147
2022 Q1 1468352 909732 51755 2429840
2022 Q2 1905530 888513 30219 2824263

Austin In the News

Austin Jobless Rate Steady At 2.8% Despite Recession Fears December 2022 Statesman Chamber Economic Forecast Sees Austin Strong Despite Inflation November 2022 Austin Monitor Austin Booms as The Nation’s Fastest-Growing Office Market In New Report December 2022 Austin Culture Map Austin Office Sublease Availabilities Reach All-Time Highs November 2022 CoStar


Austin Q4 2022 Development Pipeline

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