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Austin Office Space Market Conditions

As the capital of Texas, Austin is the second largest state capital in the United States, and the fourth largest city in Texas.  Located in central Texas, Austin became the capital city in 1838, when it was moved from its original location of Houston.

Citizens of Austin, known as Austinites, enjoy a diverse lifestyle, culture, and liberal political environment amidst the more conservative leanings of Texas, as a whole.  This has earned them the sarcastic label “People’s Republic of Austin.”   Environmentally conscious citizens of Austin are resistant to rapid growth and irresponsible development, opting to “Keep Austin Weird.”

Austin’s official slogan is The Live Music Capital of the World.  The city is host to many live music events and festivals, producing the longest-running concert music television program in America, Austin City Limits.  Many a musician has launched their career in Austin, including Willie Nelson, Janis Joplin, Robert Plant, and Stevie Ray Vaughan.

Besides it’s eclectic music and arts scene, Austin  is home to many museums and theatres.  The city itself has been the location of many Hollywood films, such as The Texas Chainsaw Massacre, Dazed and Confused, and Office Space.

Home of the University of Texas at Austin, the city developed into an economic center for technology and business in the 1980’s.  Several Fortune 500 companies have headquart offices here, including Dell (located in the suburb of Round Rock), Apple, eBay, Texas Instruments, and Whole Foods Market.  As the headquarters for many technology corporations, Austin was nicknamed “Silicon Hills” in the 90’s.  With a steady stream of engineering and computer science graduates from the university, and lower housing costs than San Francisco’s Silicon Valley, Austin is considered a high tech mecca.

Presently the Austin office space market conditions suggest that the market is beginning to rebound.  In August 2013, Austin topped Forbes’ list for job growth.  Citywide, office space vacancies dropped, although asking office rental rates continued upward.  Below are the third quarter office market statistics as reported in CBRE Research, Q3 2013.

See also Austin Office Market Information.

Austin Office Sub-Market

Vacancy Rate

Net Absorption
(SQ FT)

Avg. Rental Rate

CBD

12.1%

-16,192

Class A – $41.39
Class B – $31.26

Northwest

11%

27,314

Class A – $29.09
Class B – $24.25

Far Northwest

14%

178,494

Class A – $28.16
Class B – $24.07

North Central

23%

50,450

Class A – $30.15
Class B – $20.73

Round Rock

16.8%

23,775

Class A – N/A
Class B – $22.80

East

16.4%

-4,923

Class A – N/A
Class B – $17.31

South

20.9%

16,447

Class A – $24.00
Class B – $14.43

Southwest

8.1%

-40,057

Class A – $32.5
Class B – $25.86