The Northwest market is typically defined as the area of Austin with Wells Branch and 620 to the North, North Lamar to the East, RR 2222 to the South and Spicewood Springs to the East. In this area alone from March of 2011 to April of this year there have been a reported 80 business expansions and 42 business relocations. Prior to this rapid amount of commercial leasing activity, the NW market had suffered from large vacancy rates that reached over 27% in recent years. This was largely due to the introduction of new commercial office space that remained mostly vacant upon completion and introduction to the market.
So, why the change?
The NW market might be a sign of a healthy Austin market. Rates in the NW area are rising, meaning that landlords believe that their space is worth more and that their price is adequate for the demand they are receiving. Another reason for this boom in the NW: as vacancy rates continue to fall across the Austin area as a whole, the NW market is really the only market that can withstand a large move-in at this time since many other areas have vacancy rates around 10% and only have smaller blocks of space available for lease.
Our advice for business owners:
If you are seeking traditional office space but are not overly concerned with being in the heart of the city and would like a more scenic surrounding, look into space in the NW. Demand for this area continues to grow, meaning that we expect to see increases in rental rates. Luckily, the NW market still has the product available to allow businesses to grow.
For more information on the NW Market, including an article featuring Austin Tenant Advisors’ own Nathan Smith, click here. For more information on office space for lease in Austin visit our website or give us a call today at 512-861-0525.