Colliers highlights Austin 2Q 2016 office

​​AUSTIN – For the first time since 2012, Austin’s office market is experiencing negative absorption, dropping from 505,303 sf of positive absorption in first quarter 2016 to 24,603 sf of negative absorption in second quarter 2016. ​​​

The absorption is falling, the construction is slowing, yet the rental rates are still on the rise in the Austin market. 

Three buildings totaling 196,463 sf delivered in 2Q, and together the three buildings were 91.9 percent leased upon delivery. 

Projects that delivered in 2Q include the fully leased 74,804-sf Domain 5 building, located in the North/Domain submarket. 

The Round Rock submarket delivered 97,941 sf at 2700 La Frontera, and has three more buildings—totaling 79,634 sf—set to deliver next quarter. 

The citywide average rental rate increased by 0.9 percent from $34.39 per sf to $34.65 per sf over the quarter. 

Class A rental rates in Austin’s CBD increased by 2.7 percent over the quarter to $49.52 per sf from $47.31 per sf in 1Q​ 2016. 

Overall suburban Class A rental rates increased marginally from $35.71 per sf to $35.74 over the quarter. ​