Rents, occupancy rates rise for Austin office market

Nov 14, 2014
Austin American Statesman

Central Texas’ office market posted a strong showing in the third quarter as the region’s job growth continued to drive demand for space, new figures show

Top-tier office space was 91 percent occupied, on average, for the three months ended Sept. 30, up from 88 percent in the same quarter last year, according to Austin-based Oxford Commercial, which tracks the market. Rents for the top-tier space hit $32.95 in the third quarter, up 2.4 percent from the same quarter last year

“The office market is healthy across the board,” said Ford Alexander, co-founder and partner of Oxford Commercial, an affiliate of the global real estate services firm Cushman & Wakefield. “We continue to see companies moving in from out-of-town, and local companies in all industries are steadily expanding.”

Job growth fuels demand for white-collar office space. Austin employers added 32,100 jobs in the past four quarters, a year-over-year increase of 3.7 percent, according to Marcus & Millichap’s third-quarter office market report for Austin. The metro’s thriving high-tech sector continues to drive demand for office space, the company said

Katie Ekstrom, a vice president in Austin with CBRE, a commercial real estate services firm, said the downtown office market had one of its best quarters ever. Tenants leased more than 255,400 square feet of net new space, Oxford Commercial said

Two new downtown towers — Colorado Tower and IBC Bank Plaza, which combined will add more than 500,000 square feet of office space — are both almost fully leased, local brokers say, and are setting the stage for additional new construction

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