But Douglas believes that the very hot submarket is in the southwest. The statistics support his assertion as vacancy stood at 7.8%, while absorption for Q1 was 117,416 square feet. The total rentable square footage in this submarket is 9.5 million square feet.

So does this mean developers will flock to the southwest to plant office buildings there? Not necessarily, Douglas says. "The southwest sector has a lower vacancy rate, but it's tougher to developer there because of the topography," he explains.

And does it mean tenants – especially larger tenants – will flock to Austin's CBD with the new product going north? Again, Douglas says not necessarily, though he acknowledges the age of larger tenants could be around the corner. He works with the local economic development corporation and is seeing some interesting things. "A month ago, I would have told you no large users are looking at Austin," Douglas says. "But hearing about the activity coming through the EDC, I'd say larger tenants are looking."

Those larger tenants, however, want to see existing product before committing to a location. "Downtown, there are two buildings going north now," Douglas observes. "What we've said here is that those first couple of buildings will do well, but the next buildings will need to wait until the next cycle. Other developers will wait to see how much absorption takes place and where vacancies go before pulling the trigger on the next one."