After experiencing 37 consecutive quarters of positive net absorption, Austin's office market registered negative 1.27 million sq. ft. of net demand. There was a sharp uptick in sublease availability throughout the metro, with significant spikes in the CBD and Northwest submarket.
Overall asking rates throughout the metro stabilized after dropping to $36.64 per sq. ft. in Q1 2020, driven largely by the increase in overall available space and revised OPEX costs.
Vacancy throughout the metro increased 190 basis points, from 10.9% in Q1 2020 to 12.8% in Q2 2020.
The effects of the current economic conditions have spread to the development pipeline, as new construction activity appears to have halted. There are currently 33 projects under active construction, totaling approximately 6.5 million sq. ft. Of these, only two were started in Q2 2020.