The Austin office market this summer continues to sizzle. Although overall vacancy rates increased marginally, average rental rates rose slightly to a full-service rate of $33.54 SF/Yr, with demand for high-end space remaining stronger than ever. Downtown Class A office space made history by surpassing the $50 mark for the first time, with an average rental rate of $50.21. This upward trend in rates looks to continue as demand for premium Austin office space outpaces supply. With more than 700,000 SF of additional downtown Class A space set to deliver over the next four quarters, it will be interesting to see what impact this has on the market overall.
The industrial market continues to trend in an upward direction, as well. Overall vacancy rates are hovering at the very healthy level of 6.5%-7.0%. Rental rates are rising while new construction appears in balance with market demand. The second half of 2016 has demand appearing strong with a measurable increase coming from corporate expansion into central Texas for the first time.