Austin office market report

Q4 2022

Austin continues to act as a US leader for office employment growth with jobs increasing 4.7% in the last 12 months. Austin’s office market saw its second consecutive year of positive absorption coming in at 831,608 sf for 2022. However, Q4 reported negative quarterly absorption for the first time since Q1 2021, indicating headwinds are expected given the decline in leasing activity. As pricing and demand has continued to grow within the CBD, development activity is expanding south of the river.

72 msf

Inventory

Austin saw 3.4 msf of office product delivered in 2022, and of the 5.7 msf under development, 2.6 msf is scheduled to deliver in 2023.

(462k sf)

Net absorption

Austin’s office market saw its second consecutive year of positive absorption coming in at 831,608 sf for 2022. However, Q4 reported negative quarterly absorption for the first time since Q1 2021, indicating headwinds are expected given the decline in leasing activity.

$43.10 psf/FS

Direct asking rent

Despite the high vacancy, asking rents have risen by 4.2% since Q4 2021. Yet landlords continue to offer a discretionary allowance in addition to more flexible lease terms to attract tenants.

20.4%

Vacancy

Vacancy continues to remain at record highs with 16.2% direct vacancy and 4.2% sublet vacancy across the market.

$1.6B

Investment sales

2022 transaction volume totals $1.6 billion with average price per sf of $483, indicating Austin office values holding steady for now. However, the bulk of transactions occurred in the first half of the year. By end of October, capital markets screeched to a halt with a handful of transactions occurring in November or December.

 

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Get in-depth office market reports and insights from commercial real estate experts in the Greater Austin area. Avison Young advisors look at Austin commercial real estate activities and the latest Austin statistics to provide you expert market research on Austin's office properties.

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