In Grubb & Ellis Co.'s second-quarter report, localresearchers calculate that there is 2.45 million sf of speculativedevelopment under way. Marcus & Millichap Real EstateInvestment Services' local team suggests the same thing, recording800,000 sf of office space being delivered to market by midyear and2.5 million sf more under construction.

The Marcus & Millichap report notes that rents are pushingup to $23.21 per sf, while vacancies are hovering 13.2%. The Grubb& Ellis report places vacancy at 11.5% in the 39.2-million-sfinventory, with rents topping out at $25.88 per sf.

Ernest Brown IV, Grubb & Ellis' managing director forCentral Texas, says inquiries from outsiders for space in theAustin metro keeps growing every month. Additionally, the city ishome to University of Texas and the state capitol. The finalfoundation block for the increased demand is the area has finallyshaken free of the dot-com bust, meaning available space is onceagain being quickly absorbed.