Austin’s 3.6 percent jobless rate is significantly lower than the national average of 4.4 percent, Cushman & Wakefield said in its latest quarterly report. And job growth in the region also continues to outpace national averages, the report noted.
Citing U.S. Bureau of Labor statistics, the report said the Austin region added more than 29,000 jobs in the past 12 months, a 2.9 percent growth rate.
In another quarterly office report, global commercial real estate firm Avison Young said that “demand for office space from large technology tenants relocating to the Austin market remains strong, driving leasing activity and rental rates to new highs.”
Avison Young said rents grew almost $5 per square foot compared to June 2016. And as Class A supply grows, rental rates are projected to remain high, Avison Young said.
“While climbing operating expenses are largely responsible for such marked increases due to rising building valuations commanding higher taxes, sustained demand has held rates at an upward clip,” Avison Young said.
New building openings were a highlight of the second quarter, Cushman & Wakefield said.
More than 928,000 square feet of new space opened, including 500 W. 2nd, whose anchor tenant will be Google Inc., as well as a new office building at the Domain in North Austin, and Galleria Oaks A and Galleria Oaks B adjacent to the mixed-use Hill Country Galleria project in Bee Cave west of Austin.
Galleria Oaks A and B, each of which have 75,000 square feet, are 65 percent leased combined, said Kevin Granger, a partner in Austin with Peloton Commercial Real Estate Services. The two largest leases to date are TruCar Inc., which is leasing 36,000 square feet of space in Galleria Oaks A, and Summit Hotel Property Group, which is leasing the top floor in Galleria Oaks B, Granger said.
In the market in general, “activity is still very strong,” Granger. “We have a large amount of good organic growth of existing companies, and a large influx of new companies coming into Austin that are continuing to grow.”