As we head into the new year, Austin's office market is headed for a big boom, according to one recent report.
Commercial real estate platform CommercialEdge has released its National Office Report
, naming Austin the fastest-growing office market in the U.S., based on data through November 2022.
Austin "has been the fastest-growing office market in the country since the start of the pandemic," says CommercialEdge. And despite recent upheaval in the tech sector, including layoffs and office downsizing, the report shows office-using sectors of the labor market have added 85,000 jobs in Austin — a 28 percent increase, in the last 30 months.
To keep up with that growth, developers have added 3.1 million square feet of new office space in the city this year, increasing Austin's office stock by 3.6 percent.
Currently, 7.69 million square feet of office space is under construction in Austin, the largest supply pipeline in the country, based on percentage. "Not only that, but planned projects would further increase its stock by 22.8 percent," CommercialEdge notes.
At present, Austin's office market has a vacancy rate of 18.3 percent, but CommercialEdge calls the increase in vacancy rate "minor," due to the shear volume of new office deliveries in the market.
"The same can be said about Meta’s downsize in this hot office market: The tech giant will look to sublease a 589,000-square-foot space at 400 West Sixth Street, a mixed-use property where it signed a lease in January of this year," says CommercialEdge.
Office space in Austin is listed at $41.74 per square foot on average, down slightly (3.3 percent) over the last 12 months. It's still above the U.S. average of $38.06. As of November 30, Austin's office sector had seen $1.9 billion in sales this year.
This isn't the only report touting Austin's commercial real estate sector for 2023. The Urban Land Institute's Emerging Trends in Real Estate report calls Austin a "supernova" market — and the No. 4 market to watch in 2023