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Kim_Gatley
Kim Gatley
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enior Vice President & Director of Research at REOC Austin

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REOC Releases 3Q 2016 Office Market Report

The Austin office market remains strong heading into the final quarter of the year with momentum expected to carry sustained activity into 2017.  New leases and expansions generated 782,267 square feet of positive net absorption in the third quarter.  Healthy gains were created by several newly completed Class A properties which came online with significant pre-leasing in place.  Domain 5, for example, was delivered anchored by Trend Micro (75,000 sf).  Similarly, 2700 La Frontera Plaza came online in  the Round Rock market nearly 90% pre-leased to Houghton-Mifflin-Harcourt (87,631 sf).  In the CBD sector, the 5th and Colorado building came online with almost 90% pre-leasing.

 

In all, more than 179,000 square feet of new office space was added to the market in the third quarter bumping the year-to-date total of newly delivered office space to nearly 779,000 square feet.  To date, demand continues to outpace new supply.  As a result, the citywide vacancy rate tightened from 8.6% last quarter to 8.1% at the end of the third quarter which is lower than 9.5% recorded in the same quarter a year ago.

Strong demand and diminished supply have propelled rental rates to an all-time high.  At the close of the third quarter, the citywide average rental rate reached $34.68 per square foot on an annual basis which marks a healthy 4.5% annual increase over the same period last year.  At the top of the market, Class A buildings in the CBD command an average quoted rental rate of nearly $51 per square foot, compared to $49.46 last quarter.  (To adjust for buildings which quote rents on a triple net basis, operating expense figures have been added into the equation to arrive at an average equivalent full-service rate.) …Read Entire Post

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Engineering firm to build $12M HQ in Round Rock

performance_serviceslogoPerformance Services, an Indianapolis-based engineering firm, plans to build a $12 million regional headquarters in Round Rock. The company — which has a track record of working on hospitals, K-12 schools, local government buildings and university facilities — said Nov. 21 it has purchased 16 acres on East Old Settlers Boulevard, near Greenhill Drive, for its 60,000-square-foot building. …Read Entire Post

Diamond Building at Mueller is not your typical commercial space

muelleraustin_planThe first spec office building at Austin’s master-planned, mixed-used Mueller neighborhood, The Diamond Building is in some ways an ode to bohemia with its unconventional zigs and zags. None of the 37,198-square-feet has been pre-leased but that might change overnight — once would-be tenants realize that the views and location are outstanding.

Mueller includes 140 acres of parks and open space that mitigate heat islands created by asphalt and concrete. USGBC has ranked Mueller as gold certified for neighborhood development under a pilot program. It’s one of the largest communities under development in the world to earn the honor and the first in Texas to receive the designation in the Neighborhood Development category.

Click here to read the full article: Diamond Building at Mueller is not your typical commercial space Austin Business Journal 11-28-2016

SXSW affiliate plans 12-story office tower for corporate HQ

sxsw_logoPlans have been submitted for an office tower at 1400 Lavaca St. and public documents show that the developer is affiliated with South By Southwest. The property is described as a “corporate headquarters” in public records.

According to city documents, CZ Properties, an affiliate of South By Southwest, intends to demolish this building at 1400 Lavaca St. and build a 12-story corporate headquarters. …Read Entire Post

Developers line up for a chance to remake prime downtown Austin block

Austin Texas DowntownEight companies or partnerships have submitted proposals to transform the downtown block where the county had hoped to build a new courthouse, one of Austin’s most high-profile infill opportunities because the site could conceivably hold the tallest building in town.

The site — just south of Republic Square Park and catty-corner from the W Austin Hotel — is currently a surface parking lot at 300 Guadalupe St. The 77,215-square-foot site is one of the few remaining vacant parcels in the Central Business Districts that’s available for significant development. …Read Entire Post

Austin office tower sold to New York firm for $63 million

austinskylineBrickman, New York firm, which purchased Lavaca Plaza in 2012 and turned it around in rapid fashion, has re-entered the Austin market with the purchase of this downtown tower known for its reasonable office lease rates in a town where prices are skyrocketing. …Read Entire Post

Shovels ready for $18M office, industrial park in suburb north of Austin

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Brushy Creek Corporate Center aerial with rendering.

More than 231,000 square feet of office and spec industrial space are headed for Cedar Park. Work is set to begin next week on the $18.2 million Brushy Creek Corporate Center, a two-building development on 24 acres near Brushy Creek Road and U.S. Highway 183 in the suburb north of Austin. …Read Entire Post

Ledcor Technical Services moves HQ into North Austin mixed-use project

techridge_mixed-useLedcor Technical Services recently moved into phase one of the $400 million commercial portion of The Lakes at TechRidge near I-35 and Howard Lane.  Phase I of the mixed-use development is fully leased but construction on Phase II is expected to begin this winter. …Read Entire Post

More than 1M square feet of commercial space slated in San Marcos project

trace_highpointeTrace, a $475 million mixed-use project with 1,000 homes and hundreds of apartments as well as office and retail space, is set to rise near the outlet malls in San Marcos. Construction is expected to begin this month on the 420-acre project at Posey Road and I-35, south of the mall. …Read Entire Post

Adler Kawa Acquires Kramer 1-5 at Braker Center

Miami, FL-based real estate investment firm Adler Kawa Real Estate Advisors (AKREA) secured its first investment in Austin with the company’s acquisition of Kramer 1-5 at Braker Center (Kramer), a portfolio comprised of five single-story light industrial buildings that total 296,781 square feet on Kramer Ln.

Built in 1999 less than one mile from The Domain and the University of Texas-JJ Pickle Center, the Kramer business park buildings range in size from 50,012 square feet to 68,400 square feet and incorporate 21-foot clear heights and efficient floor plates. …Read Entire Post