Austin Job Growth Means More Office Space Demand

AUSTIN (Marcus & Millichap) – Recent corporate expansions have meant local job growth and increased demand for office space, reports Marcus & Millichap in its second-quarter 2015 office market overview.

Here are the firm’s projections for the rest of the year:

• Austin employers will add 30,500 jobs, a 3.3 percent gain. Office-using payrolls will expand at an even faster clip of 4.9 percent, or 11,400 workers. Last year, total employment grew 3.2 percent.
• Three-and-a-half million sf of office space will be completed — the largest amount since 2007. Last year, office inventory rose by 1.1 million sf.
• Despite the surge in new office space, net absorption will reach 3.2 million sf, lowering vacancy 20 basis points to 12.7 percent. This follows a 30-basis-point rise in the rate last year.
• Strong tenant demand will continue to push rents higher. Following a 5.1 percent jump last year, the average asking in the Austin office market will climb 4.5 percent to $29.43 per sf in 2015, 21.6 percent higher than the prerecession level.