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AUSTIN—Growth is the name of the game in Austin. Especially in the office market. Especially in the CBD. And especially in tech. According to Elisabeth Niles, Central and South Texas regional director of analytics for data provider Xceligent (a GlobeSt.com Thought Leader), in Q1 alone the Capital City saw nearly half a million square feet of positive absorption, including that in two newly delivered CBD buildings, both of which were nearly 100% leased.

Austin has had a tech base for a while, with Dell's presence there, and while Niles says those new leases were a good mix of traditional and tech users, the tech portion is undeniable. Such newcomers as Atlassian Software, IPSoft, Apple Computer and Facebook accounted for 165,000 square feet of that Q1 absorption. Additionally, so far in Q2, Indeed.com will be moving into 207,800 square feet in Northwest Austin, all solidifying the city's tech drive.

And while the industrial market is not as bright as the office segment, Niles reports positive absorption there, too—220,000 square feet worth (85,000 of that to tech-related firms)—with Amazon Fulfillment's recent lease of 30,000 square feet and two smaller computer recycling firms that took a total of 55,000 square feet. According to the brokers who are part of Xceligent's Austin industrial board, “76,000 square feet—both spec and preleased—are set to deliver on the industrial side in 2015,” says Niles, paling in comparison to the two million square feet (of which nearly 70% is preleased) scheduled to deliver this year on the office side. This is in addition to the additional million square feet slated to deliver in 2016, and while only 20% of that is now preleased, “It's still early.”

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Clearly, all eyes for now are on the office sector, which is growing primarily in the CBD, although Niles reports “good activity” as well in the East, Southeast and Far Northwest markets.

“We've been seeing a lot of growth in the Austin office market,” she summarizes. “The projected annual economic growth rate is 6.1% and the population is expected to grow 2.8% this year.

And while a good portion of that naturally is the Millennial generation, Xceligent's national analytics director James Cook says the incoming population is a good mix of ages, essentially, “anyone who is drawn to the environment the creative tech community instills.”

And while the retail board for Xceligent's Southwest Texas region has not yet been established, Niles confirms that, anecdotally at least, Austin's already hot live-work-play CBD environment is steaming up, much of it, naturally, “around the music scene.” 

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In fact, when asked if the brokers in the office and industrial boards sounded any cautionary notes, other than the aforementioned slower pace of industrial, Niles could report none. “A few brokers reported that they typically expect a quiet first quarter,” she says.  “It was anything but that. They're all very excited about the pace of activity and we all fully expect it to continue.”