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Colliers International Says Tenants Have Upper Hand

AUSTIN-There are few, if any, surprises in a first quarter office report put out by Colliers International's Austin office. It's still tenant heaven. Overall vacancy is up to 21.8% and rent is down across the board.

By Tim Green | Updated on May 08, 2002

AUSTIN-The city’s office market belongs to the tenants as rents keep decreasing and options continue multiplying. That’s the word from Colliers International’s first quarter office market report for Austin.

During the quarter, overall vacancy (direct and sublease space) increased to 21.8%. Midway through 2001, the vacancy rate was 14.8%. The 2.9 million sf of sublease space on the market accounted for 37.3% of the total vacant space. The far northwest submarket had the highest vacancy rate with 33.6% and the most sublease space, 1.7 million sf.

The average rental rate citywide was $23.15 per sf, down 16% from the 2001 first quarter. In the CBD, class A rent dropped to $29.19 per sf, the lowest level since 1999. The northwest and far northwest submarkets suffered sharp declines. Northwest rent fell 24% to an average of $21.78 per sf and the far northwest rent dropped 23% to $22.85 per sf. In the southwest submarket, rent dropped just 6% to $24.24 per sf.

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