The State of the Texas Office Market

by CoyDavidson on October 10, 2012

Despite a national office market that slowed during the third quarter of 2012, the major Texas Office Markets continue to exhibit improving fundamentals driven by the strength of the expanding Texas economy, particularly in the energy and technology sector.

Houston

The Houston Office market ended the third quarter 2012 with a vacancy rate of 14.2%. The vacancy rate was down over the previous quarter, with net absorption totaling 766,707 square feet in the third quarter. Year-to-date the Houston office market has recorded 3,211,280 square feet of positive net absorption. The average quoted asking rental rate for available Class A office space in the CBD was $36.85 per square foot per year at the end of the third quarter and $27.31 per square foot per year for available Suburban Class A office space.

Dallas / Fort Worth

The Dallas/Ft.Worth Office market ended the third quarter 2012 with a vacancy rate of 15.7%. The vacancy rate was down over the previous quarter, with net absorption totaling 1,717,250 square feet in the third quarter. Year-to-date the Dallas/Ft.Worth office has market has recorded 2,170,897 square feet of positive net absorption. The average quoted asking rental rate for available Class A office space in the CBD was $21.38 per square foot per year at the end of the third quarter and $23.01 per square foot per year for available Suburban Class A office space.

Austin

The Austin Office market ended the third quarter 2012 with a vacancy rate of 11.1%. The vacancy rate was up over the previous quarter, with net absorption totaling negative (35,110) square feet in the third quarter. Year-to-date the Austin office has market has recorded 1,022,475 square feet of positive net absorption. The average quoted asking rental rate for available Class A office space in the CBD was $37.99 per square foot per year at the end of the third quarter and $27.91 per square foot per year for available Suburban Class A office space.

San Antonio

The San Antonio Office market ended the third quarter 2012 with a vacancy rate of 10.8%. The vacancy rate was down over the previous quarter, with net absorption totaling 86,201 square feet in the third quarter. Year-to-date the San Antonio office has market has recorded 786,989 square feet of positive net absorption. The average quoted asking rental rate for available Class A office space in the CBD was $21.77 per square foot per year at the end of the third quarter and $23.99 per square foot per year for available Suburban Class A office space.

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