Savills Studley Releases Q1 2017 Market Report Findings for Austin

Savills Studley, the leading commercial real estate firm specializing in tenant representation, has released its Q1 2017 Austin edition of the Savills Studley Office Market Report.

The quarterly report is an in-depth compilation of office leasing statistics and trends, major transactions, submarket comparisons, employment trends and investment and development trends specific to the Austin area.

Highlights from the Q1 2017 Savills Studley Austin Office Market Report include:

• After finally slowing in Q4 2016, average asking rents in Austin returned to a blistering pace of quarter-to-quarter growth, spiking 4.8 % overall and 5.8 % for class A space in the first quarter of 2017. Average asking rents recorded in Austin CBD for Q1 2017 of $47.29 were 43.4 % above the US Index.

• Signs of deceleration may bring relief for tenants in the extremely tight Austin office market. Office sales fell sharply from $1.16 million in Q4 2016 to $460.8 million in Q1 2017 and the region’s Class A availability rose for the first time since 2014.

• Like many markets nationally, Austin experienced slow leasing activity in Q1 2017 following a flurry of big name transactions to close 2016. Despite large leases executed on behalf of eBay and Amazon, office leasing in the Austin market during the four most recent quarters totaled 4.3 msf, well below the long-term average of 8 msf. The Austin market did not register one or more 100,000 sf lease transaction in Q1 2017 after doing so in each quarter of 2016.

• The Austin market’s slowdown in leasing activity may be as attributable to a lack of supply as softening economic factors. Tenants will see no reprieve from developers in the short term as the market has less than 2.0 msf under construction compared to the peak of 3.0 msf two years prior. Trammell Crow’s new project at 500 West 2nd Street accounts for nearly a quarter of the space currently under construction and that building is already 77 % preleased.

The 2017 Q1 Savills Studley Austin Office Market Report as well as a national report and reports for each of the 29 major U.S. markets can be found at www.savills-studley.com.