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Austin Office Vacancies, Still Growing, But at Slower Pace

AUSTIN-Vacancy posted at 24.65% at the Q3 close, up just a shade in three months although sublease space tapered. A level of stability seems to be settling over the Austin office market so tenants might want to think about taking action now.

By Tim Green | Updated on October 01, 2002

AUSTIN-The Austin office market, racked by increasing vacancies for months, may be reaching a level of stability. In the third quarter, the vacancy rate increased by less than a percentage point and the average rent dropped by less than a buck per sf, according to new numbers from Staubach & Co.’s Austin office.

“I see subleases come across my desk every week,” says Kristi Svec, who compiled the figures for Staubach Co. “But I think there’s enough activity in the market to keep those leveled to where we have, for this quarter, a steady quarter. A quarter ago it wasn’t like that.”

The average citywide vacancy rate increased to 24.65% in the third quarter from 24.13% in the second quarter and the rental rate dropped to $22.40 per sf in the third quarter from $23.11 per sf in the second. A comparison to 2001 year-end figures, however, shows how unkind 2002 has been to the Austin office market. The vacancy rate was 16.61% at the end of 2001 and the average rent was $24.84 per sf.

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