Despite Austin’s annual job growth rate of 4.8% ranking among the top performing markets in the country, a recent Avison Young survey reports that Austin’s office market fundamentals have softened with its second straight quarter of negative absorption and largest occupancy loss since the onset of the pandemic. Leasing activity has also cooled down due to national economic headwinds prompting many companies to delay making long-term real estate space commitments.
Vacancy rates surpassed 20%, with most occupancy losses resulting from companies reducing their footprint and placing sublet space on the market. Sublet available space climbed to post-pandemic highs, rising by 395k sf in Q1 2023 and nearly 2.8 msf over 12 months as companies assess their space needs due to a growing hybrid work policy and potential economic slowdown.
