According to a new report from CBRE, Austin’s office market had near record high absorption and occupancy rates last year. This is due in part to technology companies moving to or expanding in the city.
“We still anticipate rent growth and that the Austin office market will continue to tighten in 2020,” said Troy Holme, executive vice president of CBRE in Austin. “This is mainly because the development side of the market is very controlled and we do not see a lot of buildings being built on spec. This will protect the market from oversupply.”
Companies are continuing to leave the expensive Bay Area in lieu of cheaper office rents in Austin. CBRE found that average asking rents in Austin were $38.89 compared to San Francisco’s $88.19. Major Bay Area companies like Adobe and Apple have also leased office space in Austin over the past decade.
It is surprising that Austin’s office market has grown the way it has since several companies have become more remote or flexible over the past few years.
“I didn’t want us to be sitting in a room somewhere in a random, quiet, isolated office,” said Mark Dewey, publisher and CEO of digital media startup Austonia. “Coworking offers a bright and energetic work environment. There’s plenty of opportunity for privacy—for the team and for individuals—and it’s against a background of people busy making their own businesses successful. It’s a very positive energy.”