CBRE: 2017 active year for Austin office market

​​AUSTIN – The local office market once again registered an active year of over one million sf of positive net absorption, reports CBRE in its fourth quarter 2017 market report.

Among other highlights from CBRE’s report:

• Developers kicked off 600,000 sf of new construction in Q4 2017, closing out the year with approximately 2.7 million sf of new office space under construction.
• Vacancy held steady in Q4 2017 at 8.8 percent, a low not seen since Q2 2001.
• Operational costs in Austin rose $0.86 per sf in the past 180 days, climbing to a citywide annual average of $9.57 per sf. To offset increasing operational costs, landlords have been pressed to again lower triple net (NNN) asking rates to a citywide average of $24.82 per sf, down from $25.22 per sf in Q3 2017 and $26.12 per sf in Q2 2017.
• Despite the decreasing triple net asking rate, the citywide average full-service gross rate rose $0.07 per sf from Q3 2017 to $34.39 per sf.
• In October 2017, Austin’s unemployment fell to 2.6 percent, the lowest level since the late ’90s.
• Technology firms accounted for 32 percent of signed office leases in the fourth quarter.