AUSTIN-Decreasing occupancy rates in Austin office buildings are being felt in rental rates. They dropped 42 cents per rentable sf to $27.15 in the second quarter from the first quarter, according to Austin-based Colliers Oxford Commercial's second quarter survey. It's the first drop since the 1999 third quarter when rates fell 10 cents per sf.
The biggest rate decrease was in the CBD, where class A space fell to $34.62 per sf from $38.42 per sf, a 10% drop. In the second half of 2000, the CBD's 97% occupancy rate helped drive overall CBD rental rates to $30.05 per rentable sf.
The survey put the citywide direct vacancy rate at 7.5% at the end of the second quarter, up from 5.7% at the end of the first quarter. Counting sublease vacancies, the vacancy rate was 14.7%, up from 8.9%.
The most popular submarkets, the far Northwest, Northwest and Southwest, had vacancy rates of 28.2% (up 13%), 13.6% (up 5.6%) and 8.6% (up 2.2%), respectively. Later this week, Angelos Angelou of Angelou Economic Advisors is to make a mid-year forecast in a rare revision of his annual January outlook.
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