Austin Office Market
| Average Asking Rent (Price/SF) | $40.31 |
| Vacancy Rate (%) | 17.8% |
| Net Absorption (SF) | 236,135 |
The Austin office market is working its way toward recovery in fits and starts, as evidenced by muted demand and rental rate hikes in the first quarter of 2022. Rental rates continue the upward trend, while vacancy remains elevated at almost 18%. Although leasing demand fell 50.0% quarter-over-quarter, construction started on over 1.6 million square feet of space in the first quarter of 2022. At the start of the year, Austin was the hottest job market in the country, with increasing demand for workers in the region. After sitting at the number-three spot for several years, Austin ranked number two in the Milken Institute’s 2022 Best-Performing Cities List. Coming in behind Provo-Orem, Utah, Austin secured the ranking due to its local talent, low tax rate and relatively low cost of living. Opportunities for investors in the Austin market has no doubt helped the city secure high rankings such as this, with $1.5 billion in investment volume in the fourth quarter of 2021 and $414.9 million so far in 2022.
Austin Industrial Market
| Average Asking Rent (Price/SF) | $12.11 |
| Vacancy Rate (%) | 3.4% |
| Net Absorption (SF) | 5,982,377 |
The Austin industrial market is experiencing unprecedented levels of development and record-low vacancy rates as the first quarter of 2022 ends. For the quarter, the market realized 5.9 million square feet of positive absorption, narrowly outpacing completions by 184,000 square feet. Vacancy continues to drop, as rates fell 340 basis points year-over-year and are now 3.4%. Since the start of 2020, vacancy rates have decreased by13.4%. Rental rates continue to rise, driven upward by new building stock and demand. In the first quarter of 2022, the average industrial rental rate crossed the $12.00/SF threshold and stands at $12.11/SF, an increase of 6.1% in the past 12 months.
Download Austin Industrial Market Report 1Q22