AUSTIN, TX—While signs point to a slowdown in leasing, it is too early to tell what type of impact that will have on the market. For now, tenant rep Savills Studley says this makes conditions more favorable to landlords, making it more difficult for growing companies to find space. New companies and startups will face stricter leasing requirements as landlords can pick and choose which companies will be the recipients of the leased space.
John Scoblick, corporate managing director at Savills Studley, tells GlobeSt.com: “It's like when the doctor says 'let's keep an eye on this'. We don't have enough data points to say this is the trend, and it may be an anomaly. While deal flow has dropped, there is no impact on vacancy. This is not enough to impact the market one way or another. If there is a cooling down, the tech companies previously overleased and this space could be filled.”
In Savills Studley's first quarter office market report, the firm observes that while rental rates and occupancy are near an all-time-high, a drop in leasing volume may hint at decelerated growth for 2016.
Short-term leases are now extremely uncommon as most companies must sign 5- to 10-year leases when securing office space. And, in many cases, sublease space now almost as expensive as direct leases from landlords. Investment sales of buildings are driving tax assessments up and these costs are being passed on to the tenant in the form of higher rents.
One example of a recent lease to dispel the slowdown rumors is the relocation and consolidation of Accruent LLC to 104,448 square feet of space at 3110 Esperanza Crossing in the Domain. The Domain is located at the geographic center of Austin and acts as Austin's “second downtown” providing residential, entertainment, retail and office uses.
“The Domain is a perfect location for our new offices,” said Accruent's CEO, Mark Friedman. “We will not only have the space to accommodate our rapid growth but we will also be able to design a working environment that reinforces our company culture. Most importantly, we will create a place where our people can thrive.”
Savills Studley represented the leading real estate and facilities management software company, which is currently located at Braker Pointe II (10801 North MoPac Expressway) and Quarry Oaks (10900A Stonelake Blvd.) and will consolidate into its new space by October 2016. Steve Walbridge, Marcus Arredondo, Scoblick and Alecia Burdick of Savills Studley represented Accruent in the negotiation, while Jonathan Tate of Endeavor represented the landlord, TR Domain LLC (TIER REIT).
“With the significant growth Accruent is experiencing, the company was looking to expand its footprint, but most importantly, wanted to consolidate its two locations,” said Scoblick.
Austin development is abundant. What are the active markets? Who are the key players? Join us at RealShare Austin for market intelligence and the best networking in the biz.
AUSTIN, TX—While signs point to a slowdown in leasing, it is too early to tell what type of impact that will have on the market. For now, tenant rep Savills Studley says this makes conditions more favorable to landlords, making it more difficult for growing companies to find space. New companies and startups will face stricter leasing requirements as landlords can pick and choose which companies will be the recipients of the leased space.
John Scoblick, corporate managing director at Savills Studley, tells GlobeSt.com: “It's like when the doctor says 'let's keep an eye on this'. We don't have enough data points to say this is the trend, and it may be an anomaly. While deal flow has dropped, there is no impact on vacancy. This is not enough to impact the market one way or another. If there is a cooling down, the tech companies previously overleased and this space could be filled.”
In Savills Studley's first quarter office market report, the firm observes that while rental rates and occupancy are near an all-time-high, a drop in leasing volume may hint at decelerated growth for 2016.
Short-term leases are now extremely uncommon as most companies must sign 5- to 10-year leases when securing office space. And, in many cases, sublease space now almost as expensive as direct leases from landlords. Investment sales of buildings are driving tax assessments up and these costs are being passed on to the tenant in the form of higher rents.
One example of a recent lease to dispel the slowdown rumors is the relocation and consolidation of Accruent LLC to 104,448 square feet of space at 3110 Esperanza Crossing in the Domain. The Domain is located at the geographic center of Austin and acts as Austin's “second downtown” providing residential, entertainment, retail and office uses.
“The Domain is a perfect location for our new offices,” said Accruent's CEO, Mark Friedman. “We will not only have the space to accommodate our rapid growth but we will also be able to design a working environment that reinforces our company culture. Most importantly, we will create a place where our people can thrive.”
Savills Studley represented the leading real estate and facilities management software company, which is currently located at Braker Pointe II (10801 North MoPac Expressway) and Quarry Oaks (10900A Stonelake Blvd.) and will consolidate into its new space by October 2016. Steve Walbridge, Marcus Arredondo, Scoblick and Alecia Burdick of Savills Studley represented Accruent in the negotiation, while Jonathan Tate of Endeavor represented the landlord, TR Domain LLC (TIER REIT).
“With the significant growth Accruent is experiencing, the company was looking to expand its footprint, but most importantly, wanted to consolidate its two locations,” said Scoblick.
Austin development is abundant. What are the active markets? Who are the key players? Join us at RealShare Austin for market intelligence and the best networking in the biz.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Lisa Brown
Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
