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Austin office market is heating up this summerAustin office market is heating up this summerhttps://www.recenter.tamu.edu/news/newstalk-texas/?Item=141792016-08-12T05:00:00Z2016-08-12T17:00:00Z

​​​​AUSTIN – The ​​Central Texas office market is showing little signs of cooling off in the second quarter.

New leases and expansions generated 705,014 sf of positive net absorption​. Newly completed Class A properties accounted for the majority of the gain. ​

In all, five new office buildings totaling more than 430,000 sf were added to the market in the second quarter bumping the year-to-date total to nearly 602,000 sf of new space. Currently, there is over 1.8 million sf of office lease space under construction, most of which has already been pre-leased.​

However, developers can’t seem to deliver space fast enough as demand continues to outpace new supply. The citywide vacancy rate tightened from 9.1 percent last quarter to 8.6 percent at the end of the second quarter; that's lower than 9.6 percent recorded at the same time a year ago.

At the end of the second quarter, the citywide average rental rate reached $34.09 per sf, a 4.2 percent increase from last year. At the top of the market, Class A buildings in the central business district command an average quoted rental rate of nearly $50 per sf.

​According to the Texas Workforce Commission, the Austin-Round Rock metro area added 38,400 new jobs over the past 12 months ending June, an annual growth rate of 4 percent. The city has an unemployment rate of 3.3 percent, comparing favorably to the Texas rate of 4.8 percent and the U.S. rate of 5.1 percent.

REOC AUSTIN
Austin-Round Rock
Office
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