Rental rates and absorption both hit new highs in 2015, according to new figures from the research team with Cushman & Wakefield/Oxford Commercial (CWOC).
CWOC’s fourth quarter market report found city-wide Class A office rental rates rose to $36.70 per square foot, up 13.4 percent from the end of 2014 when the figure was $32.36 per square foot. The figure is also the highest overall rate CWOC has recorded since it started tracking the stats in the early 1990s. As is expected, Class A office space in the CBD (Central Business District) commanded the highest rental rates of $48.43 per square foot, up 12 percent from the prior year.
Also shattering record books was the 2.16 million square feet of office space that was absorbed in 2015. That figure is a phenomenal 27 percent increase over 2014’s absorption of 1.7 million square feet – and also the largest volume of space absorption recorded. It’s worth noting 2014 also saw a 40 percent increase in absorption over 2013.
The rates and absorption figures are coupled with a tight vacancy rate of nine percent city-wide amidst 2.27 million square feet presently noted as ‘under construction’ throughout the region.
“Across the country, the spotlight remains on Austin,” notes Holliday Hinckley, a tenant representative with CWOC. “Continued job and population growth foreshadows a vibrant 2016 for the Austin market.”