With one more quarter left in 2019, the Austin office market is poised to have it's strongest year ever. Positive net demand surpassed 446,000 sq. ft. in Q3 2019, while the citywide average asking rate climbed to $38.89 per sq. ft., a historic high.
Despite the historic high in average asking rates and the phenomenal development pipeline, the defining story of Q3 2019 was 3M officially vacating their old campus in Northwest Austin, creating a dip of 1.1 million sq. ft. in absorption.
Pre-leasing activity in new product has remained strong, with more than 51% of the development pipeline having been taken.
With resounding tenant demand and ever-increasing operational costs, the citywide Full Service Gross asking rate for Q3 2019 hit a new record high for the market at $38.89 per sq. ft.
The increase in asking rents this quarter was driven largely due to rising NNN asking rates, which climbed $0.88 from Q2 2019.
Unemployment rose to 2.9% in July 2019, well below both the state average of 3.4% and the national average of 3.7%.