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Avison Young releases First Quarter 2023 Office Market Report for Austin
April 12, 2023
Long-term outlook remains positive given the area’s strong economic and labor market fundamentals.
Austin, TX – Avison Young today released its First Quarter 2023 Office Market Report for Austin. Austin’s metro economy continues to perform well with a diverse, growing job market and sustained low unemployment despite recent tech layoffs nationwide. Austin’s annual job growth rate of 4.8% ranks among the top performing markets in the country.
Despite the positive fundamentals, the office market sublease availability across Austin rose by 395,000 square feet (sf) during the first quarter of 2023 and has increased for the fourth consecutive quarter reaching an all-time high of 4.9 million sf. This is the largest occupancy loss since the onset of the pandemic.
“There’s no doubt that the real estate industry is experiencing some challenges nationwide, and even globally. Austin is feeling those effects as well, as indicated by rising office vacancy rates and negative absorption,” said Erin Morales, Principal and Managing Director of the firm’s Austin office. “Tenants continue to be attracted to newer buildings in amenity-rich, urban areas, and we anticipate that these locations will experience faster recovery than older product that is in a secondary or tertiary submarket.”
Morales added, “Overall, the fundamentals here remain strong with low unemployment, continued in-migration and high-quality of life, all of which indicate Austin should recover faster than a number of other major markets across the nation.”
Austin’s long-term outlook remains positive, given the area’s strong economic and labor market fundamentals that will help tackle the near-term softening macroeconomic landscape. The city’s rapid population growth, competitive quality of life, and growing clout as a tech hub will continue attracting companies and driving return to office rates that are some of the highest in the country.
Erin Morales ([email protected]), Principal & Managing Director, Austin: +1.512.717.3077
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