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Austin’s Office Market Enters an Absorption Phase
With new office deliveries easing, Austin’s office market is transitioning into a phase centered on absorption and stabilization. The vacancy rate remains elevated but stable, and the pace of new supply has slowed enough to allow demand to catch up over time. With momentum from Q4 2025, 2026 is poised for a steady decline in vacancies as key submarkets continue to perform.
Sublease Space Clears First
Sublease space is typically absorbed before direct space, and Austin is following that pattern strongly. Sublease availability fell by more than 1 million square feet over the past year and is down 2.2 million square feet from its Q3 2023 peak. Many tenants have already addressed excess space, reducing competition and making it easier for landlords to lease direct space.
While this improvement doesn’t immediately translate into strong net absorption, it creates the conditions necessary for it to follow.
