Q3 2017 Austin Office Research & Forecast Report

AUSTIN, Texas - Oct. 31, 2017 - PRLog -- As predicted, the office market has remained extremely strong and rates have seen a slight increase over the past quarter. The trend of big companies eating up large spaces has become the norm and the expansions of tech giants and co-working spaces have continued to embolden landlords and developers to bring speculative product to the market. Unfortunately for tenants, not enough of this product is becoming available beyond the preleasing phase to have a meaningful impact on rates or landlord concessions.

We continue to see mid to large sized companies chasing lower rates and pursuing developments just outside of the CBD in the East, South, or Domain submarkets. Companies such as FloSports, Nexstar Digital and Main Street Hub have stepped in as full building users for a few of these buildings and we are seeing very heavy activity on the remaining buildings currently planned or under construction. Significant demand for space in close proximity to downtown is driving average rates higher and is responsible for much of the absorption seen in the past three quarters, suburban Northwest and Southwest submarkets have not fared quite as well. Rising central rates have incentivized enough tenants to explore the "burbs", balancing those markets with healthy/flat growth. The exception, of course, is the Domain, which continues to successfully deploy the "build it and they will come" tactic.

There are a few blockbuster deals that are in the works including: a redevelopment plan for the 3M campus (currently under contract), sale of the Brandywine/DRA portfolio (1,164,000 SF), a possible land assemblage in close-in South Central Austin that could pave the way for some impressive new product over the next seven years, and no less than three 250K+ SF downtown tenants vying for new buildings years in advance of delivery.

Read the full report at www.colliers.com/texas/austinoffice