AUSTIN - On the heels of news that the Austin area's population officially passed the 2 million mark, the office market is also reaching record highs for occupancy and rental rates.
According to new figures from Cushman & Wakefield/Oxford Commercial (CWOC), the Austin office market's vacancy rate was 8.5 percent at the end of first quarter 2016.
Meanwhile, the overall asking rental rate hit an all-time historic high of $33.52 per sf, a 6.2 percent increase from this time last year, when the rate was $31.55.
The current rental rate is the highest ever recorded by CWOC since it started tracking statistics in the early 1990s.
In the CBD, Class A space was just 3.9 percent vacant, with asking rates reaching $49.07 per sf.
That compares with a 6.2 percent vacancy rate and rental rates of $47.47 in 1Q2015. That means vacancy decreased by 37.7 percent and rates increased by 3.8 percent during the past year.
In terms of supply, 565,438 sf of new office space was delivered in first quarter, the majority of which came online in the far northwest submarket. Another 1.6 million sf is under construction.
The market has consistently been absorbing the new space, with 430,798 being absorbed this quarter—along with the 2.2 million sf that was absorbed in 2015.
"Beyond hitting the 2 million mark, Austin's population growth shows no sign of slowing down. Projections have the area hitting 2.3 million in just four years. People want to be here now, and so do more and more investors. They're responding to the healthy appetite people have for wanting to live and work in Austin," said Greg Johnston, CWOC partner.