Austin office market ends 2013 on strong note
Jan 6, 2014
Austin American Statesman
The Austin-area office market ended 2013 on a high note, with average rents for top-tier space hitting an all-time high and the occupancy rate for that space reaching near-record levels, Oxford Commercial said.
The upward trend is expected to continue in 2014, local office brokers said Friday
In its fourth quarter report, Oxford said Class A office space in Central Texas was almost 89 percent occupied by year-end, the highest level since 2006, before the last recession. Rents for top-tier space averaged $32.47 per square foot per year — the highest on record in the market, Oxford said
By comparison, Class A occupancy was about 87 percent in the same quarter of 2012, while rents averaged $30.50 a square foot
Office market figures are one barometer of how the economy is faring, since rents and occupancies are tied to white-collar job growth. In Austin, the economy continues to be the envy of many cities for its job creation. Austin-based economist Angelos Angelou has predicted local employers will create about 29,000 new jobs in 2014
Parkway became Austin’s dominant downtown landlord in late December, when the Orlando-based firm closed on its purchase from Los Angeles-based Thomas Properties Group of five Class A downtown office buildings that include Frost Bank Tower
Rick Whiteley, a partner with Oxford Commercial, also expressed optimism about 2014.“Everything we’re seeing from local growth as well as companies and jobs continuing to move here substantiates” a job growth forecast in the 3 percent range, Whiteley said
“I think it’s going to be a good year,” said Andrew Smith, director of leasing for Parkway Properties Inc. Smith said Austin’s central business district continues to be a magnet both for new companies coming to town and existing companies relocating from the suburbs
“We’re probably working with five or six groups, all in the ‘creative class’ — software development and entrepreneurial-type companies — right now, looking for space and they are all good-sized deals,” he said.