Depending on who you ask there may or may not be plentiful supply of downtown Austin office space. Thomas Properties Group (TPG) who owns 5 class A office buildings in downtown Austin say they currently have plenty of office supply and will continue to get more over the coming months.
That may be the case however it’s possible that their space may not meet the needs or wants of potential tenants. It’s one thing to have plenty of space………..it’s another to have plenty of space that appeals to a young, hip, tech clientele complete with great views, windowed offices, lots of natural light, within the right budget, etc… Much of TPG’s space has been vacant for some time.
Office Vacancy in Downtown Austin
The office tenant mix in Downtown Austin is changing as law firms “right size” taking less space thanks to technology and other factors that have decreased the need for large chunks of office space and allow them to do more with less. As more lawfirms lease less space that may free up other available inventory in downtown Austin. Hopefully we will continue to see the trend of new startups and tech firms move into Austin’s CBD area.
Currently the office vacancy rate in Downtown Austin is 10.9% with average lease rates around $35 to $38 sf.