Austin Office Market
Annual full-service class rental rates remain elevated at $40.34/SF, a 0.5% decrease year over year. Direct availabilities increased by 200 basis points on a quarterly basis, causing the overall vacancy rate to increase by 150 basis points year over year, to a historical high of 23.8%. The under-construction pipeline has continued its six-quarter decline from the peak of 6.3 MSF recorded in the fourth quarter of 2022 and closed out the quarter with 3.8 MSF currently in progress, as the impacts of restrictive fiscal policy have been felt throughout the financial markets. Financial and political uncertainty have pushed total leasing activity down to 903,626 SF, well below the 16-year second-quarter average of 1.9 MSF.
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Austin Industrial Market
The market realized 1.2 MSF of positive absorption in the second quarter of 2024, its third continuous quarter of over 1.0 MSF of positive absorption. Overall rental rates grew 11.5% year over year to $14.49/SF, 1.5% lower than the historic high set during the previous quarter. The construction pipeline recorded deliveries of 3.1 MSF in the second quarter of 2024, with 16.7 MSF currently under construction. Following new deliveries outpacing yearly demand for the previous two years, vacancy increased by 290 basis points year over year to 10.4%.
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