Austin On Track To Lead Nation’s Office Expansion in 2022

Austin is set to be the largest projected office market expansion this year, with an estimated 10 million square feet of new space under construction. 

Research from CommercialCafe outlining the state of the 2022 office pipeline in the first quarter reveals that the Texas hub – which has benefited from strong in-migration trends throughout the pandemic – has the largest share of new supply among all markets tracked by CommercialEdge analysts, at 11.65% of existing stock.  The city has the third-largest pipeline of new office properties behind Boston and New York.

Aside from New York City, Austin was also the only city to have multiple properties in CommercialEdge’s top 20 list. The largest of the two is the nearly-1-million-square-foot Phase One of Apple’s West Parmer Lane Campus, while the second is 601 W. Second St., Block 185, a 590 foot skyscraper in the city’s downtown. 

Nashville follows closely behind, with 4.6 million square feet of new office space under construction, or 8% of existing stock. And “in addition to developments with shovels already in the ground, office projects that are still in the planning stages in Music City indicate an even larger market expansion to come,” the report notes. “Future local supply with planned projects included alongside under-construction totals is estimated to represent 15.7% of current stock.”

More than 146 million square feet of office space is currently under construction in the US as of the first quarter of 2022, with New York claiming six of the 20 largest office projects due to deliver this year. That includes the nearly 3 million square feet 50 Hudson Yards property, which took the top spot of the 20 largest office deliveries this year. And earlier this week, Bloomberg reported that private equity giant Blackstone is looking to increase its Manhattan office footprint by 1.5 million square feet – a development that bodes well for the city’s office market.

50 Hudson Yards was followed by The Spiral in New York City, Morgan North also in New York City, and Ford’s 2.2-million-square-foot headquarters campus in Dearborn, Michigan. 320 South Canal – Union Station in Chicago took the fifth spot.

“From supertall skyscrapers to sprawling campuses, the most prominent office developments estimated to wrap up this year demonstrate a decided interest in sustainability and green building practices. In fact, half of the 20 largest office projects are redevelopments that at least partially preserved pre-existing structures, while simultaneously employing some of the most modern green building materials and techniques, as well as integrating state-of-the-art smart building technologies,” the report notes.