As 2018 draws to a close, absorption levels in the office market completely rebounded from the flat first half of the year, surpassing 1.3 million sq. ft. of positive net demand for the year.
As vacancy slipped below 10% and citywide average asking rates climbed to a new historic high, developers demonstrated their continued faith in Austin by kicking off an additional 500,000 sq. ft. of new construction.
End of year absorption activity registered 723,773 sq. ft. of positive net demand, bringing the annual total to 1,380,173 sq. ft.; this is the 5th year in a row that Austin has seen yearly absorption crest 1 million sq. ft.
Vacancy rates decreased 50 basis point from 10.2% in Q3 2018 to 9.6% in Q4 2018.
The Full-Service Gross asking rate for Q4 2018 was $36.64 per sq. ft., a new record high for the Austin market.
Tenant demand remains robust leading into 2019, with more than 9 million sq. ft. of tenant demand currently in the market.