Capital City Office Vacancy Up Slightly in Second Quarter

AUSTIN (Colliers International) – Class-A rental rates in the city’s central business district (CBD) decreased by 2.5 percent between the first and second quarters of the year, while vacancy increased slightly for the third consecutive quarter as new office space continued to come on the market.

Six buildings totaling 730,000 sf were delivered in the second quarter, and 2.2 million sf of office space is currently under construction.

The citywide average rental rate increased by 3.7 percent from $28.16 to $29.20 per sf between the first and second quarters. The average CBD Class-A rental rate decreased from $42.64 to $41.58 per sf, while the average suburban Class-A rental rate increased from $31.54 to $32.87 per sf.

According to the Texas Workforce Commission, the job growth rate has stayed positive for 60 consecutive months in Texas despite a slowdown last year. Forbes recently reported that Austin’s technology job base has expanded by 17.8 percent since 2011, benefiting from the relocation of California-based companies to Central Texas.

Austin’s unemployment rate fell to 3.1 percent from 4.1 percent over the year, remaining lower than both the national average and state average.