AUSTIN, TEXAS — The Austin office market closed the third quarter with a total vacancy rate of 14.3 percent, up 360 basis points from 10.7 percent at year-end 2019, according to a new report from CBRE. The market saw approximately 371,000 square feet of negative net absorption during the third quarter, fueled largely by vacated sublease space, and has now posted about 625,000 square feet of negative absorption for the year. While the bulk of the market’s negative absorption was concentrated in the CBD, some submarkets performed well, including the Southwest, which posted about 204,000 square feet of positive absorption. According to the report, roughly 400,000 square feet of sublease space was added to the supply between the second and third quarters, yielding a total of 1.6 million square feet of vacant sublease space. While vacancy is down relative to the second quarter of 2020, the report also noted that there are some 29 office projects totaling 6.1 million square feet under construction, suggesting that it may take some additional time for occupancy to return to pre-COVID levels even if absorption turns the corner into positive territory.
