As recently reported in the Austin American Statesmen, the commercial office space vacancy rate in Austin has skyrocketed in the past year from roughly 16% vacancy to over 21% vacancy.
In a clear sign the commercial real estate market has suffered even in one of the most healthy local economies in the country, not only has the vacancy rate for commercial office space increased, but the average rental price for Class A rental space in Austin has decreased. Currently, Class A rental rates in Austin average $28.49 per square foot, a decrease of 5.8 percent in the last year.
The news however isn’t all bad, especially for small businesses looking to negotiate a better rate or make a transition to a new property, as it appears to be a renter’s market.
The Article in the Statesmen read in part as follows:
Austin's office market is still soft, a new report shows, but leasing activity is picking up and some brokers are looking to the second half of 2010 for the start of a rebound.
The vacancy rate for Class A, or top-quality buildings, averaged 23.7 percent in the second quarter, up from 16.6 percent a year ago, according to Oxford Commercial, which tracks the office market.
Class A rents averaged $28.49 per square foot per year, down 5.8 percent.
For all classes of buildings, the vacancy rate climbed to 21.3 percent from 16.5 percent a year earlier, while rents averaged $26.08 compared with $26.66 a year ago.
The overall vacancy equates to 9.1 million square feet of empty space, the highest amount ever and roughly equal to the total space downtown.
Austin also now has 1.2 million square feet of sublease space on the market, the most since late 2003, said Ford Alexander, a partner and co-founder of Oxford Commercial.
Sublease space has increased as tenants continue to find efficiencies, downsize or close their doors, Oxford brokers said.
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