Office market statistics. The Austin office market vacancy rate dropped to 8.9% nearing the end of the fourth quarter, with year-to-date net absorption at 1.81 million sq. ft. and deliveries at 1.95 million sq. ft. Thriving construction activity continues, with the amount of space under construction at 4.25 million sq. ft., including 1.89 million sq. ft. (44.5%) of that space available for lease. The quoted overall average gross rent has remained elevated at $34.66 per sq. ft.—more than 30% higher than it was five years ago.
Office loft/creative space building purchased in CBD. Real Capital Analytics data reports year-to-date office sales volume in Greater Austin at $1,584.7 billion, resulting in a year-over-year change of -31% The buyer composition is made up of 61% institutional, 19% private, 12% public listed/REITs, and 7% cross-border. A recent transaction in the local market is the acquisition by Seamless Capital of a five-story, 47,345-sq.-ft. office loft/creative space property, at 1705 Guadalupe Street in the central business district of Austin, from The Burt Group JV Imperial Advisors LLC. The office building was built in 1960 and renovated in 2014 and was 100% occupied at the time of sale.
Construction begins on SXSW headquarters. A 12-story, 145,000-sq.-ft office building at the intersection of 14th and Lavaca Streets in downtown Austin is in the works. Completion of the future headquarters of the South by Southwest festival and conference organization is anticipated in the second half of 2019, and is being developed with the latest in green energy efficient technology, including features such as a rooftop deck, low-flow plumbing, unique landscaping and a rain garden. SXSW will occupy the top three floors, while the remainder of the building will be leased out.
Recent job growth makes Austin the 17th-fastest growing major metro. The Austin Chamber of Commerce reported that Austin added 22,200 net new jobs, or 2.2%, in the 12 months ending in October. The seasonally adjusted unemployment rate is 2.6%, down from 2.9% in September.
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