MARKETVIEW
Austin Office, Q3 2019
Searing demand drives fundamentals to record highs 9.9%
6,018,055 SF
446,637 SF
241,084 SF
$38.89 PSF
*Arrows indicate change from previous quarter.
Figure 1: Net Absorption and Vacancy
Vacancy Rate (%)
Net Absorption (000s SF) 2,400
26
1,800
23
1,200
20
600
17
0
14
(600)
11
(1,200)
8 2009
2010
Q1
2011 Q2
2012 Q3
2013
2014 Q4
2015
2016
2017
Total Annual Net Absorption
2018
2019 Vacancy Rate
Source: CBRE Research, Q3 2019.
Q3 2019 CBRE Research
© 2019 CBRE, Inc. |
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MARKETVIEW AUSTIN OFFICE Figure 2: Austin Office Market Statistics
Submarket CBD Class A Class B Northwest Class A Class B Far Northwest Class A Class B Northeast Class A Class B North Class A Class B Central Class A Class B Round Rock Class A Class B East Class A
Net Rentable Area 11,499,454 8,565,694 2,621,610 16,158,365 10,542,535 5,437,698 4,927,943 3,408,649 1,392,161 2,103,166 1,031,394
Total Total Avg. FSG Under Q3 2019 Q3 2019 2019 Vacancy Availability Asking Construction Deliveries Net Net (%) (%) Rate ($) (SF) (SF) Absorption Absorption 5.8 8.4 52.49 2,324,645 501,145 629,569 5.0 7.4 57.62 2,324,645 424,602 495,695 8.6 12.1 47.82 59,231 116,474 14.3 16.1 37.12 693,330 (348,065) 116,988 17.0 18.6 41.19 693,330 (387,448) 57,522 9.5 11.8 33.66 43,428 57,034 8.2 11.4 33.67 188,078 74,606 194,077 9.4 11.0 36.74 188,078 43,733 202,436 5.9 13.0 29.50 29,783 (9,746) 15.4 24.3 26.51 314,000 157,482 275,961 9.1 18.2 26.25 314,000 115,000 286,835
891,268 734,307 -
15.5 8.2 -
18.1 8.2 -
26.38 46.65 -
-
-
39,181 29,022 -
75,035 43,753 -
723,307 1,957,209 522,914
7.8 7.8 4.4
7.8 9.3 8.3
47.49 32.50 44.34
267,038 180,939
-
29,022 12,442 9,706
43,336 76,849 24,570
1,245,386 923,602 210,610 670,874 1,467,870 641,756
8.8 18.4 47.3 10.1 6.7 0.4
9.5 19.5 47.3 11.7 7.7 1.5
30.34 28.53 30.48 25.20 37.68 45.45
86,099 853,344
228,584
4,791 5,071 7,065 522 39,620
46,229 (1,736) (251) (1,484) 161,289
464,066
152,756
22,526
142,773
716,639
12.5
12.7
36.51
9.6 11.0
10.7 11.0
40.49
75,828 12,500
23,619 9,707
11,010 14,659
Class A
1,315,782 599,316
389,278 714,678
48.36
631,500
12,500
14,807
18,209
Class B
380,417
6.2
7.1
44.28
Class A
1,406,004 433,068
4.8 6.9
6.0 11.0
26.95 32.92
83,178 138,850 138,850
-
(1,535) (13,495) 4,470
(1,989) 146,409 8,695
Class B
876,225
3.1
3.1
29.33
-
-
(14,859)
143,129
8.3 8.2
9.3 9.6
38.07
524,092
-
(20,898)
467,789
Class A
11,102,764 7,730,533
42.90
459,339
-
(17,659)
380,261
Class B
3,225,191
8.1
8.4
31.72
64,753
-
(983)
95,457
Austin Total
53,596,466
9.9
12.0
38.89
6,018,055
241,084
446,637
2,125,607
Class A
33,686,469
10.3
12.3
44.65
5,394,747
165,256
236,802
1,616,745
Class B
18,180,776
8.8
10.8
34.41
623,308
75,828
212,200
574,485
Class B South
Southeast
Southwest
Although Class C is not shown, totals are inclusive of all classes of data. Source: CBRE Research, Q3 2019.
Q3 2019 CBRE Research
© 2019 CBRE, Inc. |
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MARKETVIEW AUSTIN OFFICE Figure 3: Austin Labor Force & Unemployment
(Thousands)
(%) 8
1,300
Forecast
7
1,100
6
900
5
700
4
500
3 2
300 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Total Employment (Non-Farm)
Unemployment Rate
Source: Moody’s Analytics, June 2019. Figure 4: Historical Construction and Deliveries
MSF 6.0 5.0 4.0 3.0 2.0 1.0
Under Construction
Q3 2019
Q2 2019
Q1 2019
Q4 2018
Q3 2018
Q2 2018
Q1 2018
Q4 2017
Q3 2017
Q2 2017
Q1 2017
Q4 2016
Q3 2016
Q2 2016
Q1 2016
Q4 2015
Q3 2015
Q2 2015
0.0
Delivered Construction
Source: CBRE Research, Q3 2019. Figure 5: Significant Leases / Sales of Q3 2019
Figure 6: Q3 2019 Signed Leases by Industry
Lease (Tenant)
Property
Total SF
St. Jude Medical SC, Inc.
Seven Oaks West
130,152
Farm Credit Bank of Texas
Plaza on the Lake II
111,166
Accenture, LLP
Riata Corporate 9
90,758
Sale (Building)
Address
Total SF
Chase Tower
221 W 6th Street
404,713
Campus at the Arboretum I 10415 Morado Circle
Source: CBRE Research, Real Capital Analytics, Q3 2019.
Q3 2019 CBRE Research
Technology
12%
21%
Business Services
9%
Engineering
9%
Financial
21% 18%
8%
318,226
Health Law Firm Other
Source: CBRE Research, Q3 2019.
© 2019 CBRE, Inc. |
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MARKETVIEW AUSTIN OFFICE Figure 7: Historical Market Statistics 2012
2013
2014
2015
2016
2017
2018
2019
CBD Absorption (Net SF) Asking Rent, Avg. Annual Delivered Construction (SF) Vacancy Rate (%)
177,023 36.08 12
64,099 38.15 12
369,822 40.1 167,871 9.4
649,300 41.33 557,470 7.1
97,639 47.67 195,863 7.8
564,236 44.95 745,936 7.9
558,794 47.88 122,667 6.3
629,569 52.49 492,637 5.8
Absorption (Net SF) Asking Rent, Avg. Annual Delivered Construction (SF) Vacancy Rate (%)
677,714 25.83 15.3
179,614 26.28 10.4
224,246 29.48 143,331 9.4
669,701 31.96 591,973 8.8
286,950 32.8 372,235 8.8
471,598 33.84 386,921 8.6
445,607 36.72 308,000 9.1
116,988 37.12 315,862 14.3
Absorption (Net SF) Asking Rent, Avg. Annual Delivered Construction (SF) Vacancy Rate (%)
N/A N/A N/A N/A
366,763 27.85 12.2
79,360 28.95 13.8
198,389 30.95 128,700 9.5
336,470 30.62 9.4
230,820 31.79 6.3
77,807 32.76 6.6
194,077 33.67 396,329 8.2
Absorption (Net SF) Asking Rent, Avg. Annual Delivered Construction (SF) Vacancy Rate (%)
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
64,819 24.05 0 9.6
(35,900) 28.00 115,000 16.4
275,961 26.51 15.4
Absorption (Net SF) Asking Rent, Avg. Annual Delivered Construction (SF) Vacancy Rate (%)
(109,170) 21.63 23
90,741 23.14 23.8
222,683 22.89 15.4
90,066 27.29 214,962 13.1
251,093 25.95 46,000 10.2
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
Absorption (Net SF) Asking Rent, Avg. Annual Delivered Construction (SF) Vacancy Rate (%)
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
(18,159) 23.81 15.5
45,653 27.80 13.6
43,753 46.65 8.2
Absorption (Net SF) Asking Rent, Avg. Annual Delivered Construction (SF) Vacancy Rate (%)
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
52,348 31.39 6.2
(1,941) 33.14 10.2
76,849 32.50 26,391 7.8
Absorption (Net SF) Asking Rent, Avg. Annual Delivered Construction (SF) Vacancy Rate (%)
8,592 21.17 19.3
26,097 22.67 15.1
41,367 23.77 9.8
19,892 24.99 6.6
18,801 22.91 59,043 7
(9,845) 21.11 22,500 8.3
899 27.88 164,486 21.0
(1,736) 28.53 59,476 18.4
Absorption (Net SF) Asking Rent, Avg. Annual Delivered Construction (SF) Vacancy Rate (%)
387,386 16.38 12.7
1,722 17.2 30,451 16.7
49,392 16.71 14.9
58,736 19.55 191,990 17.9
428,135 20.13 199,408 6.6
49,398 34.67 59,655 7.5
(24,059) 43.82 246,711 17.0
161,289 37.68 719,566 37.68
Absorption (Net SF) Asking Rent, Avg. Annual Delivered Construction (SF) Vacancy Rate (%)
83,355 15.38 21
25,359 15.13 19.9
70,143 14.73 16.3
33,337 15.02 14.4
158,472 24.68 16
23,598 31.90 57,500 12.1
102,221 31.00 115,246 4.4
14,659 40.49 76,784 9.6
Absorption (Net SF) Asking Rent, Avg. Annual Delivered Construction (SF) Vacancy Rate (%)
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
71,123 23.55 29,205 20.2
49,905 26.47 16.1
146,409 26.95 4.8
Absorption (Net SF) Asking Rent, Avg. Annual Delivered Construction (SF) Vacancy Rate (%)
205,677 26.8 9.9
149,911 29.83 92,008 8.4
101,327 31.78 76,500 8.4
419,723 34.34 1,062,477 10.3
159,982 35.99 9.7
154,081 34.31 410,295 10.7
161,187 36.64 135,500 11.4
467,789 38.07 8.3
1,430,577 26.24 14.2
904,306 28.15 122,459 12.1
1,158,340 29.56 387,702 10.6
2,139,144 31.81 2,747,572 9.6
1,737,542 34.83 872,549 9.2
1,654,017 34.39 1,712,012 8.8
1,380,173 36.64 1,207,610 9.6
2,125,607 38.89 2,087,045 9.9
NORTHWEST
FAR NORTHWEST *
NORTHEAST **
NORTH CENTRAL***
NORTH**
CENTRAL**
ROUND ROCK
EAST
SOUTH
SOUTHEAST**
SOUTHWEST
AUSTIN TOTAL Absorption (Net SF) Asking Rent, Avg. Annual Delivered Construction (SF) Vacancy Rate (%)
Source: CBRE Research, Q3 2019.
Q3 2019 CBRE Research
*Submarket created in 2013 **Submarket created in 2017 ***Submarket removed in 2017
© 2019 CBRE, Inc. |
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Disclaimer: Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to confirm independently its accuracy and completeness. This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission of CBRE.