A frequent question that we are often asked is, “How much does it cost to lease office space in Austin?” While we would like to simply respond with commercial business space in Austin costs “XYZ”, it really depends on several factors:
- The location or Area of Austin that you are interested in
- Class of office space (e.g. A, B, or C), and
- Current office market conditions (e.g. available inventory, economy)
Austin Office Locations Overall the Downtown, Southwest, and West Austin office markets are going to be the most expensive areas mainly because of the limited supply of available office inventory, and the fact that most of the buildings in those areas are newer and nicer class A and B properties. Lease rates tend to be lower in the Northeast and Southeast submarkets where there is more inventory of older class C office properties. In Northwest Austin around 183/Mopac (which is the “new” Central Austin) there is an abundant mix of nice class A and B properties for lease. Of all the locations NW Austin is going to have the most options for reasonably priced, nice class b office space, and have some of the best office space deals in Austin.
Class of Office Space Commercial office building classes typically refers to the quality of the building. Factors such as age of the property, location, amenities, image, etc. determine the price or rental rates. Keep in mind that this classifying term can be challenging, as people tend to perceive quality differently.
- Class A – Generally garner the highest rental rates because they are newer with high end finishes, in superior locations, and have great amenities such as fitness centers, conference rooms, delis, business centers, etc. that are available to image conscious Tenants either free of charge or for a set price.
- Class B – Are a little bit older than class A and do not typically offer the same amenities, however the owners typically keep them in great physical and working condition. Lease rates in most areas are about $8 to $12 Sf less expensive than class A
- Class C – These buildings are generally older buildings located, in less desirable areas, and with no amenities, however in physically acceptable condition. They are great for companies seeking cost-effective space to tenants who are not particularly image-conscious such as start-ups, non-profits, or businesses seeking lower overall lease rates.
Current Office Market Conditions Obviously the economy drives office space demand. The better our economy, the more demand there is for office space in Austin as companies expand, the less inventory becomes available. As vacancy and inventory rates decrease, lease rates increase, and landlords get more confident and give out fewer concessions. Check the most recent Austin office market report.