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Austin Q3 Market Stats

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Why Austin is Well-Positioned for an Economic Downturn

Let’s talk about the elephant in the room; according to, nearly 70% of U.S. economists are predicting a recession in 2023, and whether this will be a “soft landing”, or an all-out global market crash is yet to be seen. On one hand, we are seeing strength in the U.S. labor market with job growth beating expectations month after month, the unemployment rate declining (Austin is currently below 3%), and the labor force participation rate remaining solid. On the other hand, we are experiencing the highest inflation in 40 years, with three interest rate hikes so far this year from the Federal Reserve and talk of more to come before the end of the year, according to the Associated Press.

So, what implications does this have for the Austin commercial real estate market? The key factors in this regard are population growth, the city’s current economy, and the continuation of companies relocating to Texas. The University of North Carolina’s Kenan Institute of Private Enterprise recently ranked Austin as the second-fastest growing economy in the country with local GDP growth of 4.3% this year and says “Austin’s status as a technology hub along with its high concentration of venture capital, warm climate, and vibrant cultural offerings lead to frequent comparisons with the Bay Area – and in fact, high-profile Silicon Valley companies, including Amazon, Google, Oracle, and Tesla, have recently expanded their operations in Austin”. In addition, the Austin Business Journal states that “2021 was a record year for corporate relocation and expansion announcements in the Austin metro, with 26,697 jobs announced across Central Texas.”

It is no secret that Austin’s population is booming, and this population growth is also bolstering other cities in the Austin area. In May, the Census Bureau ranked Georgetown and Leander as the two fastest-growing cities in America from July 2020 to July 2021 on a percentage basis (10.5% and 10.1%, respectively). This growth is expected to continue for the foreseeable future. Drew Scheberle, Senior Vice President of education and talent development for the Austin Chamber of Commerce, reports that the population is expected to reach 4.5 million in 2040. This and new mixed-use developments being announced almost weekly, local leaders, developers, and investors are still bullish on the future of the Austin economy and real estate market.

Due to this combination of factors, we believe that Austin’s unique position and unprecedented growth make the city well-equipped to withstand an economic downturn of any size and is likely to outperform other major cities in this event. While this might not completely shield Austin from the effects of a global recession, this should cushion the blow and help the city to weather the storm to move towards a quick recovery.

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 #1 Job Growth in America Since the Start of the Pandemic September 2022 Four Points News Austin Office Transaction Volume Increases YOY July 2022 Commercial Property Executive Austin-San Antonio is the ‘Next Great U.S. Metroplex,’ says Mayor Adler in Final Address August 2022 Austin Culture Map East Riverside Gateway Plans 2 Million Square Feet of Transit-Adjacent Growth July 2022 Towers


Austin Q3 2022 Development Pipeline

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