Austin Office Market
Annual full-service rental rates dropped from the first quarter’s historic high to $44.78/SF, reflecting a 0.6% decrease from the previous quarter and a 5.6% increase year over year. Direct availabilities increased by 10 basis points while sublet availabilities declined by 10 basis points on a quarterly basis. Overall, vacancy held steady on a quarterly basis at 23.6% as the market continues to work through the elevated level of deliveries that occurred during the past several years. The under-construction pipeline mildly ticked up, ending the quarter with 2.0 MSF under construction as restrictive fiscal policies and rising building costs curbed new office groundbreakings in the market. Macroeconomic uncertainty slowed quarterly leasing activity to 1.1 MSF, well below the 16-year second-quarter average of 2.0 MSF.
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Austin Industrial Market
The market recorded 202,559 SF of positive absorption in the second quarter of 2025, marking the 24th consecutive quarter of positive absorption. Overall rental rates declined 1.5% quarter over quarter to $14.33/SF, reflecting a decline of 4.2% from the historic high achieved during the first quarter of 2024. The construction pipeline delivered 2.6 MSF during the second quarter of 2025. The under-construction pipeline ended the quarter with 14.1 MSF remaining under construction, below the previous quarter’s pipeline of 14.6 MSF. After three years of new deliveries outpacing annual demand, vacancy increased by 430 basis points year over year to a record high of 14.3%.
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