Prior to Austin implementing shelter-in-place orders, the office market began to show signs of softening in the beginning of 2020.
While absorption remained robust, the citywide average asking rate decreased quarter-over-quarter, from $38.89 per sq. ft. in Q4 2019 to $36.64 per sq. ft. in Q1 2020. This marked decrease is attributed to both a drop in NNN asking rates as well as lowered OPEX costs.
Overall vacancy throughout the metro increased 20 basis points, from 10.7% in Q4 2019 to 10.9% in Q1 2020.
Development activity continued to thrive throughout Austin, with 41 projects totaling approximately 6.9 million sq. ft. underway at the end of Q1 2020, at 36% preleased.
Unemployment fell to 2.6% in February 2020, well below both the Texas average of 3.5% and the national average of 3.5%.