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Market Report

Austin Office Market Report

2024 Investment Forecast

One-Fourth of Austin’s Office Space Was Built in The Past Decade, Escalating Market Segmentation

New supply a blessing and a curse. Metro office stock will grow by more than 3 percent in 2024, reaching that mark for the fifth straight year. This boosts Austin to the 22nd-largest major U.S. office market by total square feet, after being outside the top 32 just a decade ago. By year-end, over one-quarter of Austin’s inventory will have been built in the past 10 years, compared to a share of roughly 9 percent for the country as a whole. Amid a post-pandemic flight-to-quality to attract in-person workers, this spotlights Austin for its plethora of options. At the same time, the magnitude of new supply is saturating the market and competing with sublease stock as companies re-evaluate physical office needs. This dynamic produces unique trends in 2024, with Austin projected for the sixth-strongest net absorption total — albeit modest by historic norms — among major Sun Belt metros, while having the fastest rising vacancy in the region. A skilled labor pool fueled by the University of Texas continues to attract firms, but supply and demand are unlikely to realign until construction abates and tempered economic growth subsides.
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