Austin Office Market Report

Supply drop-off and business formations secure second year of vacancy decline. In 2025, Austin’s vacancy rate declined year-over-year for the first time since 2017, supported by net absorption of over 3 million square feet, and despite losing roughly 9,000 office-using jobs. While some large companies have laid off workers, Austin is still a top city to start a business. In recent years, record-high business births and a relatively elevated entry rate — the share of new businesses compared to existing ones — have supported office absorption. Class A properties accounted for nearly 90 percent of net absorption in 2025, highlighting a strong preference for premium space. In 2026, more than half of the new supply will come from Apple’s Capstone Phase 2 and local government office buildings, preserving competition for existing quality space. Leasing momentum in the CBD and bordering submarkets signals that core areas will absorb a significant share of space.