Citywide vacancy remains below 10% in a tight market, with rates hovering around 9.8% since year-end 2016.
Net absorption for the overall office market is at positive 375,000 sq. ft. year-to-date. For full-year 2016, total net absorption was 1.2 million sq. ft. Direct space absorbed 537,000 sq. ft., enough to balance the negative 163,000 sq. ft. from sublease space.
The Austin office market has not ended a full year with overall negative absorption since 2002, 14 years ago.
The construction pipeline is at 700,000 sq. ft. with all current construction scheduled to deliver in 2017. More than half of that total (55%) is pre-leased, with Google, Inc.—set to occupy close to 240,000 sq. ft. at 500 West 2nd Street—among the notable forthcoming tenants.
Recycling company Balcones Resources previously occupied an East Austin warehouse that is now being converted into creative office space. This trend will continue in the area as demand for more office space for artists, designers, and other creative types only increases.
The Austin-Round Rock MSA recorded the month’s second-lowest unemployment rate among Texas MSAs, with a non-seasonally adjusted rate of 3.6% for March.