Despite Job Growth, Austin’s Office Outlook Dims
Despite Austin’s annual robust job growth rate of 4.8%, a recent Avison Young survey reports, Austin’s office market fundamentals have softened with its second straight quarter of negative absorption and largest occupancy loss since the onset of the pandemic. Leasing activity has also cooled down mainly due to the national economic headwinds prompting many companies to delay making long-term real estate space commitments.
Vacancy rates surpassed the 20% mark with the bulk of the occupancy losses resulting from companies reducing their footprint and placing sublet space on the market.
The sublet available space climbed to post-pandemic highs. Sublease space offerings rose by 395k sf in Q1 2023 and have climbed nearly 2.8 msf over the prior 12 months as companies fully assess their space needs due to a growing hybrid work policy and potential economic slowdown.