Ouch. If you’re an office tenant in downtown Austin, or a prospective one, the pain of rising rental rates has hit an all-time high and doesn’t look to be slowing down. Growth is a double-edged sword. Bringing in major tenants like Oracle, Google and Facebook to the CBD of Austin has been a boon for job growth, construction and vendors of the technology industry, but this rapid expansion comes at a price for office occupiers. Namely, higher rents.
According to the most recent reports, the average office rents in downtown Austin have never been more aggressive for Landlords—hitting over $56/PSF/YR (Gross) in the CBD, and over $40 PSF/YR NNN. This means that a 2,000 S.F. lease in downtown will run the average office user over $9,300 per month. Oof. This is a rise of over 20 percent from less than three years ago.
Construction efforts are underway to add more top-tier space to the downtown market, with over 1.1M S.F. set to deliver in 2019. While office tenants have absorbed over 1.4M S.F. in the past year in Austin, this has made pre-leasing common and a boon to the ownership and landlord side of the commercial real estate business. When spaces are filled before a shovel hits the ground, landlords negotiate with a firm wall between them and their concessions.
Negotiations in an office lease are absolutely critical, but being prepared and making sure you have the answers to any of your questions before even seeing a single building is even more important. Get the information, data and tools you need to make an informed lease decision with Tenavox.
We’re seeing office vacancies shrinking with less than 10 percent of the total market available city-wide, meaning things are getting tighter for Tenants and rents will likely continue an upward trend as a result. In a market like this, it’s extremely important to make your size count. Use options and expansion rights to occupy your space like a pro, giving your business the breathing room it needs to grow over time. Learn more about lease options and expansion here.
For access to over 100M S.F. of office, retail and industrial buildings completed with our exclusive ratings and reviews check out Tenavox-Austin. Additionally, we are proud to release our industry-first VoxLink program. A real-time link to the best, pre-vetted commercial tenant representatives in the city. Don’t hire blindly, get the right professional for your real estate needs with Tenavox.
If you have any questions or comments, contact us. Our goal is to make your lease decision an informed and satisfying process.