Austin, TX – The outlook for the US economy remains positive, with the GDP forecasted to grow between 2 to 3 percent in 2017. While Austin has experienced a little bit slower economic growth in the same period, the regional office space market remains strong. For instance, office lease rates in Austin reached a new high in the second quarter of 2017. While this is a great opportunity for office building investors, tenants must be much more proactive and begin their office space searches months before their existing leases expire in order to get the best results.
Job growth is one of the major influences in the higher office lease rates. In addition to many local companies expanding their presence, Austin continues to be on the radar of many other high profile companies looking to either relocate their headquarters or open up satellite offices. This has attributed to Austin’s decreasing unemployment rate. According to the U.S. Bureau of Labor Statistics, Central Texas added 29,000 jobs last year and the trend is on an upward trajectory. As a result, the unemployment rate is at 3.2% and is lower than the national average of 4.4%. This is a labor market that Austin has not seen since the dot com boom in the 1990’s.
Another reason why rents are so high is because building valuations continue to go up causing the tax portion of the operating expenses to climb. The areas with the highest office lease rates are Downtown and East Austin where Class A rental rates are averaging $50 to $60 sf gross. “There have been a few large office projects delivered and a few others projected to deliver which will help satisfy needs, however that has not had an impact on reducing rates,” says Nathan K Smith with Austin Tenant Advisors. “Overall vacancy rates in Austin range from 10% to 11.5% which means there will be significant competition for prime office space. Even in the suburbs Class A rents are $38 to $42 sf. If you are looking to save a few bucks then you need to focus on Class B buildings that have rents ranging from $25 to $35 sf depending on your ideal location,” he added.
If you are planning on renting office space in Austin within the next 12 months now is the time to start making plans. No economist in town has a crystal ball however the general outlook is that leasing activity and rates will remain high, and we will continue to be in a landlords market. If you want to find a great space and negotiate the best deal possible it’s important that you start the process earlier than you think. Consider hiring a local commercial real estate agent that specializes in office leasing to help you identify the best options and negotiate on your behalf. It’s also just as important to use an experienced attorney to review your lease before signing.
Austin Tenant Advisors commercial real estate agency helps companies in the search, selection, negotiation, and occupancy of office, warehouse, and retail space, and will conduct free office space search reports upon request. For more information, clients may visit their website at https://www.austintenantadvisors.com/. Their office is located at 1300 Guadalupe St #250, Austin, TX. Interested customers may call them at (512) 861-0525 or send inquiries to firstname.lastname@example.org.
Video Link: https://www.youtube.com/embed/i_-wqOHm3K0
Company Name: Austin Tenant Advisors
Contact Person: Nathan K Smith
Phone: (512) 861-0525
Address:1300 Guadalupe St #250
Country: United States