Austin Office Market
Annual full-service rental rates remain near record highs at $40.97/SF, marking a 0.2% increase year-over-year and just $0.01 below the record set during the fourth quarter of 2023. Direct availabilities rose by 20 basis points on a quarterly basis, pushing the overall vacancy up by 20 basis points quarter-over-quarter, to an all-time high of 24.1%. The under-construction pipeline has stabilized after a seven-quarter decline from the recent peak of 6.3 MSF recorded in the fourth quarter of 2022, with 2.7 MSF currently in progress. This shift reflects the effects of restrictive fiscal policy and rising building costs that have reverberated throughout the financial markets. Financial and political uncertainty have depressed total leasing activity down to 1.5 MSF, well below the 16-year third-quarter average of 1.8 MSF.
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Austin Industrial Market
The market realized 322,167 SF of positive absorption in the third quarter of 2024, marking the first quarter of under 1.0 MSF of positive absorption since the third quarter of 2023. Overall rental rates grew 14.1% year over year to $14.95/SF, a slight decline of 0.4% from the historic high set in the first quarter of 2024. The construction pipeline recorded deliveries of 559,662 SF in the third quarter of 2024, with a record 19.1 MSF currently under construction. Following two years of new deliveries outpacing annual demand, vacancy increased by 220 basis points year-over-year to 10.2%.
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