Austin Office Market
Annual full-service rental rates spiked to a new high of $44.86/SF, reflecting a quarterly increase of 2.8% increase and an 8.1% increase year over year. Direct and sublet availabilities decreased by 60 basis points and 20 basis points on a quarterly basis, respectively. As a result, the overall vacancy rate declined by 20 basis points quarter over quarter to 23.6%. The under-construction pipeline emptied out, ending the quarter with 185,641 SF under construction as The Republic delivered earlier in the quarter. Additionally, restrictive fiscal policies and rising building costs have curbed new office groundbreakings. Quarterly leasing activity increased to 1.3 MSF when compared to the previous quarter but remains well below the 16-year third-quarter average of 2.0 MSF.
Download Austin Office Market Report 3Q25
Austin Industrial Market
The market recorded 812,120 SF of positive absorption in the third quarter of 2025, marking the 25th consecutive quarter of positive absorption. Overall rental rates increased by 3.5% quarter over quarter to $14.82/SF, reflecting a decline of 1.1% from the historic high achieved during the first quarter of 2024. The construction pipeline delivered 1.6 MSF during the third quarter of 2025. The under-construction pipeline ended the quarter with 16.1 MSF remaining under construction, ticking up 1.6% quarter over quarter. After three consecutive years of new deliveries outpacing annual demand, the imbalance has persisted in 2025. Through the third quarter, developers have delivered 7.2 MSF of new space compared with 2.8 MSF of net absorption, a 4.4 MSF gap that has driven the vacancy rate up by 330 basis points year over year to a record 14.1%.
Download Austin Industrial Market Report 3Q25