Austin Office Vacancies Fall in Q2 Due to Healthy Absorption
- Aug 03, 2012
The Austin office market showed signs of healthy absorption in the second quarter of this year, as nearly 219,000 square feet of office space were leased by companies like Cirrus Logic Inc., Whole Foods Market Inc. and Green Mountain Energy Co., according to the most recent report by NAI REOC and as quoted by the Austin Business Journal.
Among the big leases secured in the second quarter of this year, four important ones, totaling 130,907 square feet of space, include:
- Foods Market, 52,500 square feet at Las Cimas II;
- Cirrus Logic, 29,202 square feet at 300 W. Sixth St.;
- Green Mountain Energy, 29,905 square feet in the same building;
- Bazaarvoice Inc., 19,300 square feet at 3900 San Clemente.
According to the NAI REOC report, the overall market vacancy rate improved to 16.4 percent, this as compared to 18.6 percent a year ago.
Another report on the Austin office market was recently published by Marcus & Millichap, according to which ArthroCare Co., Maximus, LDR Spine and WhiteGlove Health Inc. have all leased existing space within the last 12 months, and similar companies are likely to follow.
In addition, the technology sector will expand as companies such as Samsung Austin Semiconductor and Pervasive Software Inc. expand footprints to accommodate growth. On the supply side, only 50,000 square feet of space is expected to be added throughout the year, focusing nearly all of the new demand on existing space.
Of course, improved vacancies translate into higher rents. According to Marcus & Millichap, asking rents will rise 2.1 percent to $26.14 per square foot, this as effective rents tick up 3.1 percent to $21.40 per square foot, as can be viewed in the chart on the left.
Charts courtesy of Marcus & Millichap
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