The demand for more office space from various industries is driving the construction of over 750,000 square feet of office space in downtown Austin. The pre-leasing is on fire and is what is driving the development of these five spaces. The only problem is that they all are already almost 100% leased meaning there will not be an increase in office space supply. This could help the market see even more growth and show an increase the basic employment in the area which would stimulate the economy.
With this tremendous increase Austin it is now on the verge on competing on occupancy rates with San Fransisco and New York City. Its occupancy rate has increased by 4% in the past two years. "Austin's rate rose faster than any of the top 20 U.S. markets over that period, CBRE researchers found" (Hudgins).
The "demand for office space comes from a more diverse group of companies and industries, some migrating to the central business district from the suburbs and others arriving from locations around the nation and globe"(Hudgins), instead of them being just Texas companies.
Overall, the increase in the space and the tenants that will fill them are from all sorts of different industries making this historical area a very attractive place to set up shop. The population will only grow, increasing employment and driving the need for office space supply.
Works Cited: Hudgins, Matt. "Austin Office Space: More Supply, Less Demand? Guess Again." The Wall Street Journal. Dow Jones & Company, 23 Sept. 2014. Web. 30 Nov. 2015. <http://online.wsj.com/articles/austin-office-space-more-supply-less-demand-guess-again-1411507470>.
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