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Market Information: Austin

 

Economy
Office

 

Economy:  Year-End 2007

Economy: Robust

Austin’s economy was robust throughout 2007. Job growth for the 12 months ending October 2007 totaled 22,500 in Greater Austin, a growth rate of 3.1%, compared to the national rate of 1.4%.  Austin's long-term averge annual growth is 18,000 new jobs.

The Greater Austin unemployment rate declined to 3.3% in Ocrober 2007, from 3.6% 12 months earlier. By comparison, the national rate was 4.7% for the same time period.  The unemployment rate in Greater Austin remains among the lowest in the nation, as the area has one of the nation’s fastest-growing economies.

 

Office Market:  Year-End 2007

Market Expansion

The Greater Austin office market continued to expand during 2007, as economic growth remained strong. However, demand for office space has slowed from 2006. 

  • Net absorption of office space totaled 634,000 SF in Greater Austin in 2007, down from 1.9 million in 2006. 
  • Available sublease space has declined by 43,000 SF in Greater Austin in 2007, after declining by 268,000 SF in 2006. Remaining sublet space now represents 1.0% of standing inventory.
  • The overall vacancy rate in Greater Austin was 11.9% at year-end 2007, up from 10.6% at mid-year 2007 and 10.6% at the end of 2006. The direct office vacancy rate is 10.9% in Greater Austin at year-end, up from 9.7% at mid-year 2007 and 9.4% at year-end 2006.
  • There is 4.0 million SF of office space under construction in Greater Austin at year-end 2007, which is 29% pre-leased.  Of the 975,000 SF of office space delivering in the 2nd half of the year, 30% was leased upon delivery. The pipeline at year-end 2007 showed another 1.5 million SF proposed for Greater Austin, although much of this proposed space will not break ground until it is mostly or completely pre-leased.
  • Class A rents increased 6.9% in Greater Austin in 2007.
  • Investment sales activity in Greater Austin continued its strong performance in the 2nd half 2007, as investors remain attracted to Greater Austin office assets.  Sales volume totaled $1.4 billion in the 2nd half 2007, bringing the year's total to $2.5 billion.  Office sale prices averaged $302/SF in 2007 in Greater Austin, compared to $192/SF in 2006.  

To view and/or download the most recent snapshot report in an Adobe Acrobat file, click here.

 

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