Austin office prices hit record high with Apple & Tesla driving growth
Demand for office space in Austin is driving average asking rates to a record high in the first quarter of 2022, according to the latest report from real estate company CBRE Group.
Class A average asking rates were $53.34 per square foot, the first time it’s been above $50 since the company started tracking rates in 1989.The group said Austin is one of the hottest markets for office development in the country, with 30 projects totaling nearly six million square feet currently under construction.
They said the bulk of those new spaces are in the Central Business District downtown and east Austin.
It’s a bounce back from the industry’s COVID slump, as employees return to work and demand for space surges.
“The continued trend of relocations and expansions in the region, spearheaded by the construction of Apple’s new campus in northwest Austin and Tesla’s corporate headquarters relocation to the new Gigafactory in southeast Austin, drove strong population growth in the region over the past two years,” the report states.
Apple opened its first office in Austin more than 25 years ago, according to the company. Its existing campus is on Parmer Lane, and the new $1 billion facility is being built adjacent to it.
Tesla is already at No. 5, according to the ABJ.
“Companies are more than ever looking for highly-amenitized office space to lure employees to the office and recruit in a competitive labor market, which is benefitting Austin and driving more intense interest in office space in downtown, East Austin, and the Domain,” a CBRE spokesperson said. “Plus, the tight market for office space in Austin is driving development (companies will face a bottleneck of office supply, especially for the desirable buildings, in the next couple years).”