Austin is a rapidly developing city in Texas and is home to many large corporations, an excellent economy, and a fast-rising population.
It’s also home to many non-profit organizations, government buildings, and hospitals.
According to MyEListing, the average cost per sq ft for office space in Austin, TX was $35.47 in Q1 of 2022.
The vacancy rate for office buildings in Austin dropped to 20 percent.
One of the most popular office developments in the United States is Austin, Texas. There are many reasons why Austin makes a good place to live and work: its central location, easy to navigate by both cars and public transportation, has lots of amenities including restaurants and parks, and its workforce is highly skilled.
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Austin Office Space Market Highlights
This Austin CRE market study shows that Austin is an appealing, growing, and affordable city.
- Average asking rate for Austin was at its highest level ever recorded during Q1 of 2022.
- The asking rate for Class A office space in Austin is $53.34/square foot.
- First year asking rates were above $5 per SqFt.
Small business owners are looking for office space downtown do to its central location.
With its high level of livability, low costs of living, thriving technology sector, and plenty of available space, the city has become an ideal location for startups.
Office Space in Austin Rental Trends
Nationally, the national office vacancy rates hover between 15% and 16%. And the average cost for an office space ranges from $32 to $34 per square foot. In Austin, TX:
- The average annual increase in rental prices for office space was 4.49%.
- Rents for office space average $42.69 per sq ft.
- The office vacancy rate for 2020 was reported at 10.8%.
Rental prices are higher than the national averages but vacancies are low.
What are the Long-Term Changes in Austin Rent?
Austin, Texas is a hub for startups and tech companies.
Austin is the capital of Texas and home to more than 1 million people. It’s also one of the fastest-growing cities in America, with an average population growth rate of 3 percent per year since 2010. The city has been named the best place to live by Money magazine and Business Insider. And it’s no wonder: Austin boasts a thriving economy.
What are the Short-Term Changes in Austin Rent?
As the economy continues to improve and more technology firms enter the market, rents are expected to increase in the coming years.Many tech companies in the U.S. are currently seeking offices in Austin.
Two main reasons influence office rents in Austin. The first thing to consider is supply and demand.
Over the last few years, Austin has experienced an increase in the amount of startup activity and new companies opening up shop. The city is now home to over 100 startups, which is a significant jump from the 50 or so that were here just five years ago.
The number of startups in Austin has grown by about 30 percent since 2012, according to data compiled by the Austin Technology Council (ATC). This growth has been fueled by the city’s low cost of living, and strong tech talent pool.
The second factor is COVID-19 which has forced many businesses and organizations to move their offices and operations to Texas.
Austin Market Forecast for the Rest of the Year
Despite Austin having one of the lowest office vacancy rates in the nation, it will still see an uptick in office space availability by 2022.
This will be because of an expanding economy and the opening of more offices. Rental vacancy rates will remain low, but rental prices will keep rising.
As more companies continue to grow, they need more space to accommodate their employees.
Takeaways for Office Space Investors
Austin has become one of the country‘s fastest-growing cities for commercial real estate, which makes it an attractive place for investors from all walks of life.
Investors will benefit from receiving a high rental rate because of its popular status.
The market for commercial real estate development in Austin, Texas has been growing steadily. As the world’s economies continue to grow and companies expand their operations, demand for new offices will rise.
The cost of living in the region is relatively low, and there are a lot of companies growing in the city.
Investors looking for an Austin commercial real estate investment property should consider this Austin commercial real estate report because it highlights the city’s growing demand for business space.
As long as its strong economic climate continues, there will be an increasing need for office space.
Location matters, Austin is central to many important locations, including Dallas, and Ceder Park.
