Rental Rates Up in Texas Office Markets

According to Newmark’s third quarter 2023 office survey…

In Austin, annual full-service asking rental rates are up 3.4%, to nearly $41 a square foot (SF). Occupancy is down half a point, to 22%. The construction pipeline has slightly dropped to just over five million square feet and leasing activity is at a 16-year low.

Dallas annual full-service asking rental rates increased to a historical high of $29.49/SF, a 2.0% increase year over year. Occupancy declined for the fourth consecutive quarter to 24.3%. The under-construction pipeline continued to remain steady, nearly three million SF in process.

And in Houston, annual full-service asking rental rates increased to an all-time high of $30.24/SF, a 0.5% increase year over year. Overall vacancy rates rose by 50 basis points yoy to a historical high of 25.0%. The under-construction pipeline remains stable. Total leasing activity reflects decreases of 55.5% year over year and 48.4% quarter over quarter.