Austin displays its influence as a major investment destination and its attractiveness for company expansions or relocations.
Austin office vacancy at 15.3%
Ten months into 2022, the overall vacancy is at 15.3%, up 120 basis points from last year at 14.1%. Availability is at 22.1%, a significant increase from October 2021 at 18.9%. The difference between this figure and the vacancy rate reflects expected future move-outs. The Austin office market has recorded 6.1 million sq. ft. of leasing activity, comprised of both new leases and renewals, while net absorption (move-ins minus move-outs) is at a positive 2 million sq. ft., up 20% from a positive 1.7 million sq. ft. this time last year. The amount of square feet delivered to the Austin office market from January through October is 3.9 million sq. ft., down 2.3% from October 2021.
Healthy leasing activity
Despite the increase in vacancy, net absorption (move-ins minus move-outs) and leasing activity remained active. Significant lease transactions in 2022 include TRS leasing 235,000 sq. ft. in Mueller Business District— Bravo in the East submarket; Whole Foods Market Headquarters subleasing 188,111 sq. ft. at 525 N. Lamar Blvd. in the CBD; Teacher Retirement System of Texas occupying 158,163 sq. ft. at Mueller Business District—Alpha in the East submarket; TikTok subleasing 126,429 sq. ft. at 300 Colorado St. in the CBD; and Atmosphere taking 114,413 sq. ft. at 2043 S. Lamar Blvd. in the South submarket. The average asking full-service rent in the Austin office market metro is $42.15 per sq. ft., up by 4.3% from this time last year at $40.40.
Meta to sublease space at Sixth and Guadalupe
Facebook parent Meta will reportedly sublease its office space at Sixth and Guadalupe, the 66-story high-rise is currently under construction in downtown Austin. Meta pre-leased the entire office portion of tower at the end of 2021, making it one of the largest leases in Austin’s history. Before the economic environment changed, Meta was expected to move into the 589,112 sq. ft. of office space on floors 14 through 32 once the tower was completed in Q3 2023.
Director of Research
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