Downtown Class-A Office Rent Surpasses Average Rate

Ryan Poulos says the Austin area continues to see strong demand in every sector.

AUSTIN, TX—Second quarter commercial real estate data indicate continued strong demand for office, industrial and retail space throughout the city as vacancy rates remain exceptionally low, according to the Real Estate Council of Austin (RECA). While overall office vacancy rates actually increased slightly from 8.45% in the first quarter of 2016 to 8.98% in the second quarter, downtown class-A office space surpassed an average rental rate of $50 for the first time in history.

“The Austin office market this summer continues to sizzle. Although overall vacancy rates increased marginally, average rental rates rose slightly to a full-service rate of $33.54 per square foot annually, with demand for high-end space remaining stronger than ever,” said Ryan Kasten, managing director with Cushman & Wakefield Austin. “Downtown class-A office space made history by surpassing the $50 mark for the first time, with an average rental rate of $50.21. This upward trend in rates looks to continue as demand for premium Austin office space outpaces supply. With more than 700,000 square feet of additional downtown class-A space set to deliver over the next four quarters, it will be interesting to see what impact this has on the market overall.”