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Austin's office market construction pipeline increases to 2.4M SF
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Austin’s strong economy continues to spur office development with over 2.4M SF currently under construction. Over 188,000 SF of new inventory delivered during Q2, bringing 2014 year-to-date delivered inventory to 587,657 SF. Seven buildings totaling 199,286 SF delivered in Q2, with the most notable delivery being Seaholm Power Plant Building (117,000 SF) which is now 97.0% leased to Athena Healthcare. Other notable deals for Q2 are Dropbox (55,000 SF) at 501 Congress Ave., Whole Foods (40,000 SF) at 311 Bowie and Wework (34,000 SF) at One American Center.
Austin’s office market posted 85,623 SF of positive net absorption in Q2 2014, pushing year-to-date 2014 net absorption to positive 375,246 SF.
The citywide average rental rate increased 0.9% from $28.33 per SF to $28.59 per SF over the quarter and 4.7% from $26.53 per SF to $27.77 per SF over the year. The average CBD rental rate decreased slightly to $40.94, while the average suburban rental rate increased to $30.71.
According to local economists, 2014 job growth will remain strong with 68,000 to 72,000 new jobs forecasted for the year. Austin’s unemployment rate fell to 4.1% from 4.6% over the year. Austin area home sales rose 11.0% between May 2013 and May 2014, a sign that the area’s economy is growing.
Economy looks to remain strong in 2014 driven by employment growth in the tech and hospitality sectors.
Release Date08/12/2014 - 07:00