Thanks to Tesla, Apple and Samsung, demand for office space in Austin has hit a record high. The Texas capital is now one of the top markets in the U.S. for office development, according to Austionia.
In Austin, competition for offices has driven average asking rates to more than $53 per square foot, according to a recent CBRE report. The surge marked the first time rates were more than $50 since the company began tracking in 1989.
Since March 2021, company relocations and expansions triggered a population boom providing the Austin metro with a “robust” employment rate, the report said. With Apple’s Northwest Austin campus and Tesla’s gigafactory spearheading this population surge, Oxford Economics data forecasts a population increase of roughly 243,000 people over the next five years.
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Demand for Austin office space is also coming from Texas’ relatively high rate of workers returning to offices. The Austin metro currently boasts 63 percent occupancy rate, according to Kastle Systems’ back to work barometer.
“Following two disruptive years, the Austin office market is bouncing back from the COVID-induced slump,” the report says. “As daily COVID cases continued to decline substantially in Austin, there has been an uptick in employees returning to the workplace in early 2022.”
April 11 marked Apple’s return to office deadline whereby all employees are required to work from the office at least one day per week. In another three weeks, they will be expected in the office twice per week.
The influx of big-name companies is also changing Austin’s skyline as more and more towers are popping up across the downtown area. Austin’s high-rises and skyscrapers have become the latest hot ticket in the Texas capital. Most recently, Snapchat signed a lease for two floors at an office tower in Austin’s central business district.
[Austonia] – Maddy Sperling