Flight to quality keeps Austin’s CBD office rents at a premium

Asking rents in CBD show a clear premium compared to the suburban market, which is indicative of the sustained flight to quality trend. This is evident in the rental rate spread, where the suburban market averages $44 while the CBD averages $70. For Class A assets, suburban buildings average $53 and their CBD counterparts lead at $76. The widening spread in asking rental rates over the past year highlights a highly bifurcated market. CBD asking rents have increased by 2.1%, while suburban rents have declined by 4.8% over the same period. While the CBD may struggle with elevated vacancy rates, its top-tier assets are proving resilient in both value and positioning. The consistent demand for premier downtown locations is driven by tenants – including law firms, finance, tech, and government agencies – who are willing to pay for a prestigious address, visibility, and high-end amenities. This signals that investors and landlords remain confident in downtown’s long-term draw as the symbolic center of commerce.