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Office Market Insight

Austin Q2 2024 Market Stats

$30.89
Avg. NNN Rent
20.3%
Vacancy Rate
163K
SF Delivered
3.8M
SF Under Construction

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The Rising Appeal of Mixed-Use Developments in the Austin Office Market

As the commercial real estate market continues to evolve, mixed-use developments are emerging as a compelling solution to meet the shifting preferences of tenants and investors alike. These integrated projects, which blend commercial, recreational, and retail spaces into cohesive environments, are capturing increasing attention for their ability to create vibrant, amenity-rich communities that align with contemporary lifestyle and business needs.

The appeal of mixed-use developments is largely driven by their ability to deliver a holistic, interconnected experience for occupants. In an era where flexibility and convenience are paramount, tenants are increasingly seeking office environments that provide more than just a place to work. Mixed-use projects cater to these desires by combining diverse elements—office spaces, retail, and recreational facilities—into one location. This integration fosters a dynamic atmosphere where employees can seamlessly transition between work, leisure, and daily living.

One of the key advantages of mixed-use developments is their alignment with the growing preference for walkability and health. These projects offer an attractive solution, especially in Austin, a market that values communal exercise and a reduced reliance on transportation. Employees can walk to work, shop, dine, and engage in recreational activities all within a single development, enhancing convenience and reducing commuting stress. This walkable environment improves quality of life and increases productivity and job satisfaction.

As seen in two of the most recent office building deliveries, Victory Plaza and 7001 Burnet exemplify the modern trend of integrating these developments. Victory Plaza is surrounded by walkable midcentury neighborhoods and a wide range of retail options, while its rooftop features offer panoramic views and a dynamic social environment. Similarly, 7001 Burnet blends commercial and recreational elements by including ground-floor retail spaces and innovative amenities like rooftop pickleball courts, catering to a growing demand for active and interactive leisure options. Both buildings also feature outdoor communal terraces, fostering a sense of social connectivity and offering inviting spaces for relaxation and collaboration. This blend of retail, recreational, and shared spaces demonstrates a commitment to creating environments that support work and lifestyle needs, enhancing the appeal and functionality of these office properties.

Real estate professionals and investors embrace mixed-use opportunities as a strategic move to stay ahead of market trends. These developments are not only in demand for tenants but also represent a blueprint for future office space evolution. They address the growing need for versatile, amenity-rich environments and reflect an understanding of modern tenant preferences. The vibrancy and appeal of these developments often lead to higher occupancy rates and premium rents, making them financially attractive.

Austin Sublease Activity

Quarter Class A Office Class B Office Class C Office Total
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
2022 Q3 2536072 1265781 28336 3829191
2022 Q4 3331840 1437075 32726 4812712
2023 Q1 3898586 1450787 39880 5389254
2023 Q2 4436146 1478106 34539 5948791
2024 Q3 4772705 1546187 15571 6334463
2024 Q1 4119632 1334443 57875 5511950
2024 Q2 4034107 1260450 53194 5347751

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