There are more than 3.2 million sf of sublease space available and the amount of sublease flex space has jumped to about 1.3 million sf with the recent addition of 100,000 sf from the Parmer Business Park in the northwest submarket. The total Austin office market consists of about 29 million sf.
Each submarket has felt the impact of thousands of job cuts and slower job growth. The hardest hit, the northwest submarket, seems to have stabilized, accounting for 49% of the city's sublease space. Now, however, other submarkets have joined the empty space race.
In the CBD, about 80,000 sf will soon be available at the Chase Bank Building at Seventh and Lavaca streets as a large law firm moves to the new 300 W. Sixth Street building. Even as it opens, the new 442,000-sf building, a CarrAmerica project, is just 50% leased. The two Computer Sciences Corp. buildings, also coming online, have 111,000 sf of sublease space available. Other downtown buildings also have significant amounts of sublease space on the market.
The overall picture should be a bit clearer in the next few weeks as market reports from Capital Market Research, Colliers Oxford and NAI/Commercial Industrial Properties Co. are released.
At the end of the third quarter, the overall office occupancy rate was 83.9%, down from 95.9% percent at the 2000 third quarter close. The average rental rate for class A space was $27.79 per sf at the end of Q3 2001, off from $30.21 per sf the previous year. The figures are from Colliers Oxford's third quarter market report.
Just as telling is the decline in commercial construction permits. The city of Austin issued 1,086 permits in 2001, down from 1,165 the prior year. The value is down 6.6% to $521.5 million from $568 million.
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