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Office Vacancies Are Highest in Austin, San Francisco and Seattle
Austin, San Francisco and Seattle took the brunt of the COVID wallop in terms of loss of occupancy during the past 12 months. Office vacancy rates in these areas increased by 720 bps, 480 bps and 450 bps, respectively, according to CommercialEdge research.
Pre-COVID, these markets had single-digit vacancy rates due to high demand, but the transition to remote work in these tech hubs quickly emptied offices.
The Austin office market, in particular, suffered the greatest slump in occupancy. Here, vacancies increased from 7.8 percent in February 2020 to 15.1 percent in February 2021. This occurred even despite the fact that the city’s office-using employment grew by 6 percent last year and major employers including Oracle and Tesla relocated to Austin.
The city’s oversupply of office space further accelerated vacancy rates. Previously, Austin had one of the most sizable construction pipelines in the nation, delivering 4.6 percent of the total stock since the beginning of 2020. Plus, many firms are subleasing office space. In fact, sublease vacancy rates grew from 1.5 to 3.6 percent year-over-year.
- ◦Lease
