RENT DOWN, VACANCY UP IN THIRD QUARTER OF 2019
Rent decreased and vacancy increased in the third quarter of 2019 Austin office market with a total of 1,250,402 square feet of negative net absorption registering in the Class A market. Class B had 180,000 square feet of positive net absorption while Class C properties had 46,670 square feet of negative net absorption. This resulted in citywide vacancy of 11.5% up from 9.3% in Q2 of 2019. Class A CBD vacancy was up from 5.7 to 5.8%.
There is currently 5,000,000 + square feet of office space under construction with about 45% pre leased. The fourth quarter of 2019 is forecasted to deliver over one million square feet of office space with 800,000+ pre leased.
The average rental rate decreased over the quarter compared to Q2 of 2019 from $35.72/sf to $35.38/sf. Rent for Class A lease space dropped by 6.2% to $49.47/sf from $52.78 in Q2 of 2019.