Rising Tech Sector Challenges Impact Austin’s Office Market

Austin office vacancy increase, tech sector impact on office market, CommercialEdge office report, Austin construction projects

Smart Austin Concierge

May 24, 2023

Austin’s thriving tech scene has contributed to the recent spike in office vacancies. According to a CommercialEdge report, the metro’s vacancy rate increased 5.9 percent year-over-year (YOY) in April, reaching 22 percent. As a substantial tech hub, Austin is feeling the effects of weakened demand in the industry. The report highlights that underway construction projects represent 6.7 percent of Austin’s existing office inventory. Additionally, the average U.S. office listing rate stood at $38.23/sf, increasing 2.3 percent YOY, while the national vacancy rate was 16.7 percent, up 100 basis points YOY. In the South, Miami led in terms of prices with asking rents reaching $46.60/sf, and Washington, D.C. and Houston topped the charts in sales volume, at $509M and $466M respectively. To cope with the market shift, businesses in Austin need to adapt and plan for these changing circumstances. For a detailed look at the real estate market in Austin, check out our [Austin Home Search](https://smartaustinrealty.com/austin-home-search/) and [Relocation Guide](https://smartaustinrealty.com/moving-to-austin-texas-the-ultimate-relocation-guide/). Stay in the loop about current real estate industry insights and trends by following our blog.

Reference: [Tech sector woes put pressure on major office markets](https://www.recenter.tamu.edu/news/newstalk-texas/?Item=29177)