While smaller leases dominate YTD transactions, overall leasing activity remains slow in Austin - United States
While smaller leases dominate YTD transactions, overall leasing activity remains slow in Austin
Due to uncertainty surrounding hybrid work and return to office plans, a trend has emerged as tenants are taking less office space due to hybrid scenarios. Tenants who are reducing their footprint but occupying higher quality spaces are a significant part of this trend.
As of 2023, 1.1 million sf of office space, ranging from 1k-5k sf, has been in demand as seen in recent leasing activity. Leases ranging from 5k-10k sf follow closely in this trend with 645k sf office space leased since the start of the year.
Year-to-date leasing activity taking place between 1k-5k sf office spaces has decreased 32% year-over-year. This decline in leasing activity is indicative of broader market trends and economic factors such as economic uncertainty, changing work-from-home trends, or financial constraints on businesses following the COVID-19 pandemic, which have led businesses to reevaluate their future office space needs.