Workplace improvement in Austin retained sturdy momentum firstly of this 12 months, which highlighted the metro’s resilience. The market ranked second nationwide when it comes to new workplace area underway, behind Boston, CommercialEdge knowledge reveals. Different fundamentals lagged, nevertheless, as the big quantity of recent area coming on-line pressured vacancies and funding values.
The coworking sector continues to develop as a viable resolution to low utilization, which Austin is scuffling with as nicely, as its emptiness saved growing at a quick tempo. There have been 7,814 shared workplace area places throughout the U.S. as of February, up 25 p.c year-over-year, the newest CommercialEdge report reveals. The South led exercise—the Southwest’s complete shared area section grew 13 p.c, to 17 million sq. toes, whereas the Southeast’s elevated 18 p.c, to 33.3 million.
Austin’s pipeline ranked second nationwide
Austin builders had 3.6 million sq. toes of workplace area beneath development as of February, which was 3.7 p.c of current inventory—300 foundation factors above the U.S. determine. This was the second-largest provide pipeline amongst all main metros tracked by CommercialEdge, behind solely Boston’s 6.5 million sq. toes.
Austin’s workplace market remains to be rising considerably sooner than its Solar Belt friends, together with San Diego (3.2 p.c of inventory underway), Nashville, Tenn. (2.6 p.c), Miami (2.3 p.c) Dallas (1 p.c) and Houston (0.9 p.c).
Lincoln Property Co., Phoenix Property Co. and DivcoWest are creating The Republic, an 833,000-square-foot workplace tower in downtown Austin—the biggest of all initiatives that have been nonetheless underway in February. The partnership began development in 2022 and expects to complete the 48-story constructing later this 12 months.
Two different main developments broke floor final 12 months. Certainly one of them is a non-competitive property—the Texas Division of Emergency Administration began work on its $423 million headquarters and emergency operations heart final April. Plans name for a 296,000-square-foot campus.
Apple broke floor on one other workplace constructing at its $1 billion campus, which was initially deliberate to embody some 3 million sq. toes at full build-out. The brand new improvement is a part of the campus’ second part, which started in early 2023.
Builders accomplished solely 65,200 sq. toes of recent area within the first months of 2025—an 87 p.c decline year-over-year, indicating that momentum could be slowing down.
Conversions not a possible avenue for now
Final 12 months, Austin metropolis authorities printed a report that aimed to research the potential benefits of office-to-residential conversion initiatives and determine buildings appropriate for adaptive reuse. Among the many chief causes have been rising emptiness and wish for housing, together with continued efforts from stakeholders to scale back their publicity to the sector.
CommercialEdge’s Conversion Feasibility Index—a device that goals to determine the most effective candidates for conversion—ranks workplace buildings on a three-tier system. Austin had 15 properties—encompassing 1.4 million sq. toes—that had a CFI rating of 90 to 100, inserting them in Tier 1, making them splendid candidates for a possible conversion. Nevertheless, Austin authorities are unlikely to assist builders with tax exemptions or different incentives within the foreseeable future. The latest such mission accomplished out there got here on-line in 2004, which added 90 items.
Investments off to a gradual begin
Within the first two months of this 12 months, Austin traders traded $66 million in workplace property. A complete of 10 properties modified palms, encompassing 230,598 sq. toes. These properties traded for a mean of $376.1 per sq. foot, greater than double the $177.5 nationwide determine.
In comparison with its Solar Belt friends, Austin’s quantity was considerably low, behind Houston ($282 million), Dallas ($205 million) and San Diego ($191 million), however forward of Miami ($55 million) and Nashville ($6 million).
Final 12 months’s largest workplace transaction closed in December. Cousins Properties acquired The Sail Tower, in downtown Austin, for greater than $521 million. Trammell Crow Co. bought the 804,000-square-foot asset, which is totally leased to Google till 2038.
Provide dynamics pressured emptiness
Emptiness throughout Austin’s workplace market clocked in at 27.4 p.c in February, 770 foundation factors greater than the nationwide determine and up 530 foundation factors year-over-year. Important quantities of recent improvement and continued downsizing of footprints each contributed to this.
Austin lagged all its Solar Belt peer markets. Of those, Miami fared finest (15.7 p.c), adopted by Nashville (17.7 p.c), San Diego (20.8 p.c), Dallas (23.8 p.c) and Houston (23.1 p.c).
Workplace lease offers have been few and much in between. In September final 12 months, RBC Wealth Administration agreed to occupy 11,710 sq. toes at Uplands Company Middle, owned by Drawbridge Realty. With this deal, the 291,448-square-foot property reached nearly full occupancy. Different tenants embody Tricentis USA Corp., WuXi Scientific, Quisitive, Kimley-Horn and ResearchPoint International.
One other vital lease closed in September final 12 months, when IBM secured 320,000 sq. toes at Cousins Properties’ Area 12 in suburban Austin. Nevertheless, this deal didn’t affect the market’s emptiness, because it concerned the idea of an current lease, with IBM set to swap with Meta Platforms for the area, beginning in January 2026.
New coworking supplier opens first Austin location
The Malin opened its first Texas coworking location in October final 12 months. The corporate opened a 12,000-square-foot location at Pennybacker Capital’s 71,623-square-foot workplace constructing in East Austin.
Austin’s market continued to develop its shared workplace section. It had almost 1.8 million sq. toes of coworking area as of February, which represented 1.8 p.c of its complete stock.
Texas’ capital lagged most of its Solar Belt friends on this regard—it was behind Miami (3.7 p.c of complete), Nashville (3.4 p.c) and San Diego (2.3 p.c), and on par with Dallas (1.8 p.c) and Houston (1.8 p.c).
