The CBRE count pegged absorption at 85,573 sf, a showing attributable to several large pre-leases in the southwest submarket. It's a bright spot and a definite start, albeit a small one, in a market bearing a 6% unemployment rate and continued angst in its high-tech and semiconductor sectors.
Buls Hodge is taking part of the blame for the extra space. It said the sublease space came on the market recently, but just now made it into the database.
The biweekly submarket update shows the city's northwest remains at the head of the pack, with a 30.13% vacancy. Buls Hodge puts overall vacancy at 22%, The CBD is standing at 18.17% and the southwest, 23.56%.
The trend these days, says Mike Buls, is the way that rates are being quoted. Triple net quotes have been replaced by gross, base year or full-service. And yes, rent is still dropping.
Austin-based Colliers International's Q2 report said rent dropped about $4.60 per sf citywide in the past year. The latest accounting had the class A rate at $22.55 per sf full service while the CBD, once reaping rent in the mid-$30 per sf range, is $28.37 per sf, a 17% drop from Q2 2001.
Austin, though, has weathered storms in the past and will do so again, CBRE stressed in its midyear report. In the late 1980s, the city had a 25-year inventory of office space, but rent, occupancy and buildings were rising within a few years and the market was there to support the upward mobility. "Despite the current state of the Austin office market," the researchers said, "the future remains optimistic.
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