Austin office market stays hot in 1Q 2015

AUSTIN – Driven by the city’s thriving tech sector, Austin’s office market remained strong in first quarter 2015, with occupancy rates and average rents rise rising compared to 1Q 2014, according to Cushman & Wakefield | Oxford Commercial.

The report shows that the occupancy rate for the highest-quality, or Class A, office space rose to 91 percent, up from 90 percent a year ago.

The average rent for Class A space averaged $35.60 per sf, up from $32.70 in 1Q 2014.

Even with more than 3.5 million sf of office space currently under construction, “there aren’t enough new construction projects underway as the majority of office space coming online this year has been preleased,” said Jason Steinberg with Equitable Commercial Realty in Austin.

Austin’s tech sector is boosting demand for top-tier office space. With a 25.6 percent growth in tech talent from 2010-2013, CBRE ranked Austin ninth among 50 markets for attracting and growing tech talent.

Erin Morales with CBRE in Austin said that downtown Austin has seen “an incredible transformation of culture in the last decade,” primarily due to tech companies that want to locate downtown because it helps them recruit and retain top talent.