Leasing Stays Positive for Austin, San Antonio

Aug 19, 2014
GlobeSt

For the smaller two of Texas’ four largest markets, the trends in office, industrial and retail are mostly upward. That is, upward except in the case of vacancies, which generally show year-over-year declines for Austin and San Antonio


The exception to the rule, at least on a Y-O-Y basis, is Austin industrial vacancy. It finished the second quarter at 12.5%, which is higher than the previous quarter but still lower than a year ago, when it was 13.3%. The vacancy rate for Austin has bounced between 11.8% and 12.3% since then, according to Xceligent data


Q2 saw positive absorption in the Austin SMSA’s industrial. At 54,539 square feet out of a market of approximately 47.9 million square feet, that may not be much, but it is at least positive following a Q1 that ended in the negative column


The picture was noticeably brighter for Austin’s office market, which Xceligent notes “continues a strong growth trend” with 306,517 square feet of positive absorption. Across the Austin area, office vacancy has fallen 300 basis points Y-O-Y to 9.6%


Most of the quarter’s leasing activity took place in class A buildings in Austin’s Northwest sector. That being said, the biggest lease during Q2 occurred in the Southwest sector: SolarWinds’ occupancy of 220,218 square feet at the Summit at Lantana


For San Antonio office, Q2 news was also upbeat. The sector posted 297,378 square feet of positive absorption during the quarter, marking the third consecutive quarter of growth


The vacancy rate, while still higher than that of Austin, has shown progress over the past 12 months. San Antonio office ended Q2 with direct vacancy of 17.5%, down 200 bps from a year ago. Asking rents have risen Y-O-Y, from $19.56 at the end of Q2 2013 to $19.95 a year later


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