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Downtown Austin's office market presents a paradox: historic vacancy at 32.4% coexisting with some of the strongest Class A absorption in the country. The flight to quality is the defining trend — trophy buildings captured 1.2 million SF of positive absorption in 2025 while Class B shed nearly 400K SF in Q4 alone. Tenants are consolidating into fewer, higher-quality floors at buildings like The Republic, Capitol Tower, and 301 Congress, often at steep discounts from pre-pandemic rates. The sublease overhang from Big Tech — Meta (558K SF at Sixth and Guadalupe), Google (Block 185, expected to finally occupy in 2026), Indeed (98K SF downtown plus 184K SF at the Domain) — remains the market's defining challenge. But it is improving: sublease availability declined from a peak of 4.6M SF to 3.2M SF, and tenant-improvement allowances have reached record highs as landlords compete for occupancy. The silver lining is the construction shutdown. Only 100K SF was under construction at year-end 2025 — a 93.7% collapse — and Lincoln Property Co.'s Mark Miller stated bluntly that no major office building will start before 2030. With Waterline's 703K SF of Class AA product delivering mid-2026 as the last major office project, the supply side is effectively closed. Cap rates at 6.5% and sale prices averaging $186/SF offer entry points that were unthinkable two years ago. The smart money is betting that Austin's tech ecosystem, corporate relocations (Nvidia, IBM, Apple), and 10,600 new jobs announced in 2025 will eventually absorb the overhang — the question is timing, not trajectory.
Average rent: $60.57/SF. Range: $40 - $75/SF. YoY growth: 3.4%.
Vacancy rate: 32.4%. Trend: stable. Downtown Austin office vacancy hit a historic 32.4% in Q4 2025, driven by 14 million SF of new supply delivered since 2020 — including the 801K SF Republic tower and the ongoing Waterline (703K SF Class AA, delivering mid-2026). But the headline number masks a bifurcated market. Trophy and Class A buildings absorbed 1.2M+ SF in 2025, powered by a decisive 'flight to quality' trend, while Class B posted significant negative absorption (-395K SF in Q4 alone). Sublease inventory is declining — down to 3.2M SF from a peak of 4.6M SF — but remains a drag, with Meta (558K SF), Indeed (98K SF downtown), and Athenahealth (112K SF) still marketing large blocks. The construction pipeline has essentially shut down: only 100K SF was under construction at year-end, and Lincoln Property Co. states no major office groundbreaking is expected before 2030.Net absorption: 440,000 SF.
Average cap rate: 6.5%. Range: 4% - 7.5%.
Under construction: 100,453 SF. Planned: 0 SF. Deliveries next 12 months: 703,000 SF.
Population: 10,503. Growth rate: 1.7%. Median household income: $154,867. Job growth: 1.4%.
Austin, TX
Avg Rent
$60.57
/SF FSG+3.4% YoY
Vacancy
32.4%
Avg Cap Rate
6.5%
4–7.5%Net Absorption
440K SF
Downtown Austin's office market presents a paradox: historic vacancy at 32.4% coexisting with some of the strongest Class A absorption in the country. The flight to quality is the defining trend — trophy buildings captured 1.2 million SF of positive absorption in 2025 while Class B shed nearly 400K SF in Q4 alone. Tenants are consolidating into fewer, higher-quality floors at buildings like The Republic, Capitol Tower, and 301 Congress, often at steep discounts from pre-pandemic rates.
The sublease overhang from Big Tech — Meta (558K SF at Sixth and Guadalupe), Google (Block 185, expected to finally occupy in 2026), Indeed (98K SF downtown plus 184K SF at the Domain) — remains the market's defining challenge. But it is improving: sublease availability declined from a peak of 4.6M SF to 3.2M SF, and tenant-improvement allowances have reached record highs as landlords compete for occupancy.
The silver lining is the construction shutdown. Only 100K SF was under construction at year-end 2025 — a 93.7% collapse — and Lincoln Property Co.'s Mark Miller stated bluntly that no major office building will start before 2030. With Waterline's 703K SF of Class AA product delivering mid-2026 as the last major office project, the supply side is effectively closed. Cap rates at 6.5% and sale prices averaging $186/SF offer entry points that were unthinkable two years ago. The smart money is betting that Austin's tech ecosystem, corporate relocations (Nvidia, IBM, Apple), and 10,600 new jobs announced in 2025 will eventually absorb the overhang — the question is timing, not trajectory.
Average
$60.57
/SF FSG
Low
$40.00
/SF FSG
High
$75.00
/SF FSG
Vacancy Rate
32.4%
Net Absorption
440K SF
12 months (2025, CBD only)
Downtown Austin office vacancy hit a historic 32.4% in Q4 2025, driven by 14 million SF of new supply delivered since 2020 — including the 801K SF Republic tower and the ongoing Waterline (703K SF Class AA, delivering mid-2026). But the headline number masks a bifurcated market. Trophy and Class A buildings absorbed 1.2M+ SF in 2025, powered by a decisive 'flight to quality' trend, while Class B posted significant negative absorption (-395K SF in Q4 alone). Sublease inventory is declining — down to 3.2M SF from a peak of 4.6M SF — but remains a drag, with Meta (558K SF), Indeed (98K SF downtown), and Athenahealth (112K SF) still marketing large blocks. The construction pipeline has essentially shut down: only 100K SF was under construction at year-end, and Lincoln Property Co. states no major office groundbreaking is expected before 2030.
Avg Cap Rate
6.5%
Cap Rate Range
4.0% – 7.5%
| Address | Price | $/SF | Cap Rate | Date | SF | Class |
|---|---|---|---|---|---|---|
| Cielo Center I, II, III, 1250 S Capital of TX Hwy | $48,000,000 | $168 | — | 2025-12 | 286,106 | A |
| Northview Business Center, 9001 N I-35 | $40,000,000 | $153 | — | 2025-12 | 261,546 | B |
| Encino Trace I & II, 5707 Southwest Pkwy | $55,000,000 | $168 | — | 2025-09 | 326,852 | A |
| Chase Park (Bldgs 1-5), 7600 Chevy Chase Dr | $47,000,000 | $150 | — | 2025-09 | 313,988 | B |
| University Park, 3300 N I-35 | $26,200,000 | $126 | — | 2025-06 | 207,000 | B |
Under Construction
100K SF
Planned
0 SF
Deliveries (12mo)
703K SF
Waterline
Lincoln Property Co. / Kairoi Residential
74-story, 1,025 ft — tallest building in Texas. 703K SF Class AA office + hotel. Rainey Street District.
The Republic
Endeavor Real Estate Group
48-story tower, ~50% preleased. Vista Equity Partners anchor tenant (subleasing 79K SF).
Block 185 (Google Tower)
Trammell Crow / Hines
Google pre-leased 2019, expected to occupy ~2026. Largely vacant since delivery.
ATX Tower
TBD
58-story mixed-use tower under construction downtown.
Signed 99,370 SF at One Uptown (NW Austin), expanding Austin footprint to 230K+ SF. Additional 79K SF expansion expected in 2026.
Q3 2025
Relocated HQ to The Republic (201K SF). However, subleasing 79.5K SF at The Republic and 73.4K SF at Frost Bank Tower.
2025
Signed 60K SF HQ lease at 301 Congress Ave (CBD) — tech company choosing to expand downtown.
Q1 2025
Accelerating move into Domain 12 (320K SF, Cousins Properties) approximately one year ahead of schedule.
Late 2025
558K SF at Sixth and Guadalupe remains the largest sublease availability in Austin. Pre-leased 33 floors in 2021, never occupied. One 30K SF tenant secured.
2025
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