Oxford Commercial’s recent first quarter of 2015 Austin Office Market update demonstrates the strength of the local office market with occupancy rates and average rents up compared to Q1 2014. Occupancy is up to 91% from 90% a year ago and Class A rental rates are now at $35.60/SF compared to $32.70 a year ago.
New construction of Class A office helps with the supply side of things but according to Jason Steinberg with Equitable Commercial Realty there aren’t enough new projects under construction to keep up with demand. Ryan Kasten with Cushman & Wakefield | Oxford Commercial notes that nearly 950,000 square feet of new Class A office was delivered to the market in the first quarter of 2015 but 83% of the space was pre-leased.
According to CBRE Austin is among the nation’s top 10 large markets for tech-driven office leasing demand. With this downtown Austin has seen “an incredible transformation of culture in the last decade” primarily because of tech companies wanting to locate in the downtown office market. Two of the largest deals in the first quarter included the tech firms Google leasing 200,000+ square feet downtown and Indeed leased 220,000 square feet in the NW submarket.
Austin American Statesman article by Shonda Novak – Tech keeps office demand high
