REOC: Austin office market still hot 2Q 2016

​​AUSTIN – The Austin office market is as hot as the sizzling South Texas summer temperatures and it showed little sign of cooling in second quarter 2016.

New leases and expansions generated 705,014 sf of positive net absorption led by Accruent LLC with 104,448 sf at Domain 4. 

Newly completed Class A properties which came online with significant preleasing in place accounted for the majority of the gain.

Developers can’t seem to deliver space fast enough as demand continues to outpace new supply. 

As a result, the citywide vacancy rate tightened from 9.1 percent in 1Q 2016 to 8.6 percent at the end of 2Q 2016 which is lower than 9.6 percent recorded in 2Q 2015. 

Strong demand and diminished supply have propelled rental rates to an all-time high.