Q4 2015 Austin Office Market Research & Forecast Report
Citywide positive net absorption continues to peak
According to Wallethub’s list of “2016’s Best & Worst Cities to Find a Job”, Austin ranks 3rd in the nation behind Plano, Texas and Overland Park, Kansas. The strong numbers in this report prove that despite low oil prices that are taking a toll on other Texas markets, Austin continues to thrive.
Once again, overall positive net absorption in the Austin market has reached the highest ever recorded. Tenants moving into new office space during Q4 2015 amount to a positive net absorption of 902,046 square feet.
Five buildings totaling 676,904 square feet delivered in the fourth quarter and 1,579,496 square feet of office space is currently under construction. Projects that delivered in Q4 include Lamar Central, a 168,752 SF mixed-use development in the West Central submarket. In the Northwest submarket, Quarry Oaks III delivered and is 100% leased.
The citywide average rental rate increased by only 0.6% from $30.52 to $30.71 over the quarter. Class A rental rates in Austin’s CBD increased by 1.4% over the quarter to $44.36, a small increase in comparison to the 7% increase that occurred in Q3. Suburban submarkets also saw an increase in rental rates as the average Class A suburban rental rate increased from $32.73 per square foot to $33.16 per square foot over the quarter.
Austin’s unemployment rate of 3.3% is now well below the state average of 4.5% and the national average of 4.8%. Job Growth in the city is also remarkably higher than the state and national average with a 3.9% annual increase in job growth.
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