Austin Records Fourth-Highest Office Market Rent Growth

The tech industry led a rebound in Austin office leasing activity in 2021, fueled by increased hiring and demand for tech products and services, according to CBRE’s annual Tech-30 report. Austin recorded the fourth-highest office market rent growth among the top 30 North American tech markets between second quarter 2019 and 2021.

Tech growth is strongly correlated with office rent growth in Tech-30 markets. Austin is among four office markets recording double-digit percentage increases in average asking rents between second quarter 2019 and second quarter 2021, with a 10.8 percent gain.

Robust job growth in the tech industry is powering an early-stage office recovery, with Austin recording a 16.4 percent increase in tech employment growth. Developers flocked to build new office supply in Austin, with 4.6 million square feet under construction in second quarter 2021, the eighth most among Tech-30 markets and the most of any non-coastal metro.

“The pandemic has only accelerated Austin’s growth as a leading tech hub, with continued tech migration from coastal metros expected to drive healthy demand for office space for years to come,” said Marc Vanderslice, senior vice president with CBRE’s Austin office. “The tech industry accounted for 39 percent of Austin office leases signed in third quarter 2021, when the Austin office market registered the first quarter of positive net demand since the pandemic began.”