Austin’s Office Vacancy Dips Below the National Average

As of February, Austin’s office vacancy rate decreased significantly, reaching 15.4 percent and marking a 90-basis point decrease since January, according to CommercialEdge data. The metro’s vacancy rate outperformed the national average, which clocked in at 15.7 percent the same month.

The pandemic further accelerated the Texas capital’s ongoing construction boom, contributing to the office market’s rapidly increasing vacancy. While at the beginning of 2021, Austin’s vacancy rate has been relatively on par with the national average, by July it surpassed the U.S. average by 60 basis points, at 16.1 percent.

Among similar Sun Belt markets, Austin’s vacancy was similar to that of Charlotte (15.3 percent) and Phoenix (15.5. percent), while Atlanta (22.3 percent) and Dallas (17.1 percent) bore lower rates.

Austin Welcomes Big Tenants

It was the talk of the town when social networking service TikTok signed a major commitment at a recently completed downtown Austin tower in February. The Chinese-owned company inked a 125,000-square-foot sublease at Cousins Properties’ 300 Colorado tower. TikTok will occupy the top six floors of the 32-story, 368,798-square-foot high-rise that came online last year.

Starwood Capital Group and Vanderbilt Partners entered another notable lease at their five-building office park in Northwest Austin. Spanish multinational company Ferrovial Services took 11,575 square feet at The Campus at Arboretum, a 319,000-square-foot office complex at 10415-10431 Morado Circle and 10814 Jollyville Road.

In February, Austin Northwest was the submarket with the highest vacancy rate, hitting 22.5 percent. Other high-vacancy submarkets included Austin East (20.1 percent) and Downtown (18.2 percent). Austin North, on the other hand, continues to be one of the top performing submarkets, with an average of 6.4 percent. Round Rock (4.9 percent) and Southeast Austin (7.1 percent) also registered low rates.

CommercialEdge covers 8M+ property records in the United States. View the latest CommercialEdge national monthly office report here.