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Avison Young releases its Second Quarter 2022 Office Market Report for Austin
July 7, 2022
Austin, TX – Avison Young has released its Second Quarter 2022 Office Market Report for Austin. The report notes that office job growth continues to outpace the rest of the U.S., while construction activity climbs to new highs, particularly within urban submarkets including the Central Business District (CBD), East side, and North Central, where demand for high-quality urban office space is robust.
There is currently 8.5 million square feet of office product under development in the market with pre-leasing in urban submarkets reaching almost 55%.
Austin has added approximately 75,000 new office jobs, a 23% increase since February 2020. Leading the nation in office employment growth, Class A office property continues to drive new occupancy with a 12.9% vacancy rate. Class B assets are seeing 19% vacancy and overall, the market has a 15.4% office vacancy rate.
Sublease availability is at 3.8% and has declined over 40% since Q4 2020, however, there was a slight quarter-over-quarter uptick as new, large blocks of space came to market.
Avison Young Principal and Tenant Advisor, Carl Condon who is based in the firm’s Austin office noted, “The Austin leasing market continues to outperform major markets across the country given the influx of new business and talent to the Austin area. There's no shortage of demand from tenants who want to be in top tier projects and they are often competing for the same space. Fortunately, there is new construction in the pipeline.
He observed that it will be important to keep a close eye on absorption and sublease availability over the coming quarters given the recent economic headwinds of higher interest rates and inflationary pressure.
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