Economy: Austin Economy Continued To Show Strength
Despite ongoing uncertainty, Austin’s economy remained resilient through Q3 2026, supported by continued population growth and business expansion. The region added approximately 18,200 jobs year-over-year, representing 1.3% employment growth. Austin’s labor market continued to outperform many major U.S. metros, with an unemployment rate of 3.7%, well below the national rate and reflecting the area’s strong economic fundamentals.
Supply & Demand: Leasing Activity Remained Strong
Office market fundamentals improved in Q3 2026 as tenant activity remained steady and occupancy levels moved higher. Leasing volume totaled approximately 1.1 million square feet (msf) across the metro, reflecting another quarter of solid transaction activity and continued confidence in Austin's office sector. The Central Business District (CBD) accounted for nearly 36.0% of total leasing volume, underscoring ongoing demand for premier downtown properties. Occupancy gains also strengthened during the quarter, with the market recording approximately 229,000 square feet (sf) of positive net absorption. Rather than being driven by a handful of large occupancies, the positive absorption stemmed from a broad range of tenants across the market taking occupancy of previously leased space, signaling improving demand throughout the market.
Despite the improvement in demand, citywide vacancy increased slightly to 27.1%. The rise was driven primarily by the delivery of Waterline, a new trophy office tower in the CBD that added 700,000 sf of vacant inventory to the market. As a result, CBD vacancy increased 230 basis points (bps) quarter-over-quarter to 33.3%. Meanwhile, sublease availability declined to approximately 3.2 msf, continuing a gradual downward trend and signaling that excess space is steadily being absorbed across the market. Sublease space represented approximately 18.0% of total office availability.
Pricing: Average Asking Rents Continued To Rise
The completion of Waterline further expanded Austin’s inventory of top-tier office space, helping drive asking rents to record levels. The market's average full-service asking rent rose to a record $50.47 per square foot (psf), while the citywide Class A asking rents increased to $55.37 psf. The CBD continued to command the region's highest rental rates, with average Class A asking rents rising to $70.97 psf.
