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Market Report

Austin Office Market Report

2Q 2023

Some Major Pandemic-Era Commitments Reverse
Course as Tech Headwinds Ripple Through Austin

Sublet stock grows as a recently thriving sector hits roadblocks. Austin’s office segment had been a darling of the pandemic as the tech ecosystem expanded at a rapid pace. These same companies that entered the metro, however, have been among the most challenged as of late, resulting in staff reductions and circumspect real estate needs. Social media conglomerate Meta withdrew its plans to occupy nearly 600,000 square feet downtown, opting to sublease. Similarly, another social media company, TikTok, announced that it will sublease 126,000 square feet of downtown space it had committed to in 2022, but never occupied. Fortune 500 firm 3M joined them this May by also subletting a 205,000-square-foot spot near The Domain. The adaptability of remote and hybrid work models, especially in the tech industry, is allowing firms looking to cut costs to relinquish space during a downturn. Austin’s tech-centric nature makes it particularly vulnerable to sector-specific volatility.
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