Other Savills Studley research findings include decreased leasing activity, tenant improvements reserved for creditworthy tenants and a sharp increase in off-market deals. The level of office building lease activity has plunged by 15.2% with rising costs of doing business in Austin due to escalating wages and increasing rents. With some of the lowest concession packages for an office market in the country, Austin landlords will provide tenant improvement allowances, however flexibility is limited to the most creditworthy tenants. Similar to the San Francisco Bay Area, multiple submarkets in Austin are seeing pre-emptive strikes on space and a sharp increase in off-market deals, a sure sign that demand for space in a market that has very few big block options is still very robust.

AUSTIN, TX—Austin is one of the fastest growing areas in the country, but as a result, has a real transportation challenge ahead of it. Capital Metro's Austin In Motion study found that congestion/traffic is the most serious problem that has come from fast growth in the Austin area, according to 70% of respondents. There is simply not enough capacity in the current transportation system to accommodate the vast growth.

Looking ahead, Austin's transportation infrastructure will be a threat to its future economic growth, which could have a softening effect on the office market. Austin desperately needs vast improvements in the capacity of roadways and mass transit, according to a fourth quarter office report by Savills Studley. The quarterly report is a compilation of office leasing statistics and trends, major transactions, submarket comparisons, employment trends, and investment and development trends specific to the Austin region.

John Scoblick, corporate managing director, Savills Studley tells GlobeSt.com: “Our inadequate transportation system and the resulting congestion and traffic is recognized by the majority of Austonians and business leaders as the number one issue facing the city as a result of the cities fast growth. Left unchecked, it will impact the status of Austin as a leading office market and jeopardize its continued growth and quality of life. Unlike what Oracle recently announced in developing a new Austin office project and acquiring nearby apartments for their employees use, this is not a solution for most companies. A long-term transportation solution will require a most comprehensive and expensive plan.”

Any transit alternative or package of alternatives should have the potential to remove at least 10% of automobile trips from area roadways, and preferably 20%. Proposals such as demand reduction includes programs such as carpooling and vanpooling, which reduce the number of trips, and telecommuting, which removes trips completely. Austin Citizens for Personal Rapid Transit supports and encourages these efforts as being cost-efficient alternatives to single-occupancy vehicles. However, it does not believe that these problems can be solved by demand measures alone. Capacity increases such as more roads, improved bus service and light rail transit are options. Air quality is another problem that concerns environmentally conscious Austin. Removing single-occupant auto trips is the best opportunity to improve both the congestion and air quality problems plaguing Austin.

Other Savills Studley research findings include decreased leasing activity, tenant improvements reserved for creditworthy tenants and a sharp increase in off-market deals. The level of office building lease activity has plunged by 15.2% with rising costs of doing business in Austin due to escalating wages and increasing rents. With some of the lowest concession packages for an office market in the country, Austin landlords will provide tenant improvement allowances, however flexibility is limited to the most creditworthy tenants. Similar to the San Francisco Bay Area, multiple submarkets in Austin are seeing pre-emptive strikes on space and a sharp increase in off-market deals, a sure sign that demand for space in a market that has very few big block options is still very robust.