Job & population growth continue to reduce office space supply
For eight consecutive quarters the Austin office market has seen positive absorption mainly due to strong job growth (currently 4.4%) & population growth. Demand for office space is high as companies continue to expand or move to Austin. As a result rental rates continue to push upwards. Over 1.5 million sf of office space was leased in 2011 which is the highest rental activity in 12 years. With no spec buildings planned to be built before being preleased the expectation is that rent rates will continue to grow over the next 5 years similar to if not higher than what we saw in the 2000 and 2006 markets.
As a result of all this there has been a lot of investor confidence in & interest in Austin office property investment. It’s said to be the strongest investment market in over 15 years. Buyers are interested because they predict continued growth in the Austin economy and sellers wnat to sell because it’s a sellers market.
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