Over that last year or two Austin has received numerous accolades including the most recent report by Grubb and Ellis that Austin will be the 10th strongest commercial real estate market nationally for the next 4 years. These reports continue to confirm and reinforce my decision 11 years ago to relocate both my personal and professional life to this great city of Austin, Texas. The same holds true for a lot of other companies as they are in the process of relocating or thinking about relocating their businesses here to take advantage of the low cost of doing business, educated workforce, and entrepreneurial and energetic spirit.
The fact that Austin is poised to be a strong commercial real estate market is awesome for the Austin economy. On the other hand companies and individuals that lease Austin Office Space must consider the consequences of this good news:
- 1. Office space availability will continue to shrink
- 2. Shrinkage of available space means lease rates will continue to rise
For those that lease office space what can you and your broker do now to try and mitigate these increases?
- Review your lease contract and office space needs
- Depending on when your lease expires consider negotiating your lease renewal earlier to try and lock in lower rates now. Even if your lease does not expire for another 2-3 years.
- If you plan on expanding within the next 6-12 months consider negotiating first rights on space as well as lease rates now to possibly secure available space and lower rates now.
- If you plan on leasing new space within the next 6-12 months you might consider starting the process now as opposed to later. Just because you sign a lease now that doesn’t mean you have to commence now. You can typically sign a lease contract 6 months before lease commencement depending on the size of the deal or improvements that need to be done.
Based on all the reports the Austin commercial real estate market is only getting better. It’s never too early to start negotiating your Austin office lease renewal or search for additional or new space. Lease rates are only going to continue going up. Start now and increase your chances of securing space and locking in lower rates.