AUSTIN (REOC Austin) – New deliveries and healthy leasing activity brought the Austin office market to a solid finish in fourth quarter 2014, reports REOC Austin in its latest quarterly market report.
Four new buildings were delivered: IBC Bank Plaza (194,749 sf) in the CBD; Domain 7 (221,888 sf) in the Northwest sector; and Champions I (116,800 sf) and Champions II (103,800 sf), also in the Northwest sector.
Preleasing in these buildings contributed to the 267,427 sf of positive net absorption tallied in the final quarter.
The Class-A submarket had the highest amount of positive net absorption for both the quarter and the year, marking 223,734 sf and 822,735 sf, respectively. The net change in occupied space for the year totaled more than 1.2 million sf for the office market as a whole.
The office market closed the year with a citywide vacancy rate of 10 percent compared with 9 percent last quarter but an improvement over the 11.3 percent recorded in the same quarter a year ago.
The Class-A submarket closed the year with a vacancy rate of 11.1 percent, up from 9.1 percent last quarter but slightly better than the 11.8 percent recorded a year ago.
The average citywide quoted rental rate remained stable over the quarter at $26.06 per sf on an annual full-service basis. That's $0.47 (1.8 percent) higher than a year ago.
The average quoted rental rate for Class-A office space climbed $1.36 from a year ago to $32.61 for an annual increase of 4.4 percent.
The average rent for suburban office space stands at $26.25 compared with $36.52 in the CBD. Class-A properties in the suburban submarkets average $31.54, while Class-A buildings downtown command an average of $42.99.