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Continued construction and rising rental rates. The Austin office market vacancy rate rose to 8.5% nearing the end of the first quarter, with year-to-date net absorption at 400,000 sq. ft. and deliveries at close to 1 million sq. ft. Increasing construction activity continues, with the amount of space under construction at 4.3 million sq. ft., including 1.6 million sq. ft. (38.6%) of that space available for lease. The quoted overall average full-service rent continues to rise at $34.97 sq. ft., up $0.27 from $34.70 this time last month.
Revamping Congress Avenue building. Bank of America Center, a 26-story, 263,058-sq.-ft. office tower located in the heart of Downtown Austin at 6th Street and Congress Avenue is getting $5 million worth of renovations. Current tenants Cloudera Inc., The Downtown Austin Alliance, and Cava Grill will be reaping the benefits to the major modernizations. Quoted office rents combined with operating expenses on Congress Avenue are about $52.51 per sq. ft. on average, compared to the overall Greater Austin office market averaging around $35.00.
Headquarters for Yeti Coolers sold. Lincoln Property sold Lantana Ridge, a three-story, two-building office complex totaling 168,923 sq. ft. at 7601 Southwest Parkway. Developed in 2017, the set of buildings was fully leased by Yeti.
Austin economy the most robust in nearly two decades. The Austin-area unemployment rate continued to fall during 2017, reaching a seasonally unadjusted rate of 2.6% in November, pushing wages up and in some cases, making it more difficult to fill job openings as employers compete for workers in a shrinking labor pool. AngelouEconomics’ annual economic forecast reported a fairly sunny outlook for the year ahead: the economy will grow, albeit at a slower pace than in the past.
Director of Research
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