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The Austin Office Market in September 2026: Steady Rents, Shrinking Pipeline

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Austin’s office market is doing something it hasn’t done in a while: holding steady in the right direction. Vacancy is down year over year, rents are inching up instead of sliding, and tenants are absorbing space faster than developers are delivering it. It’s not a boom — but it’s no longer a slide, either.

Here’s where things stand as of mid-September, with the numbers courtesy of CoStar’s current Austin office report (data as of September 16, 2026).

The market at a glance

  • Vacancy: 15.7% — down 0.7 points from a year ago and holding at the level it reached in the spring. Still high by Austin’s historical standards (the long-run average is closer to 11%), but no longer climbing.
  • Net absorption: about 2.5 million SF over the trailing twelve months, with roughly 1.8 million SF of that so far in 2026. Tenants are taking more space than they’re giving back.
  • Asking rents: about $44/SF full-service on average, up 1.7% year over year. Landlords are keeping face rents flat-to-up and competing with concessions instead.
  • Under construction: about 1.1 million SF, the smallest pipeline in years. Waterline’s 715,000 SF downtown is the last big speculative tower in the cycle, and nothing of that size has started behind it.

What it costs, by building class

  • Class A (4–5 Star): about $56/SF asking, with 20.5% vacancy — the most available space, and the most demand. On a triple-net basis, the CBD and Domain run roughly $38–$46/SF NNN, trophy towers about $53, and comparable suburban buildings in the Northwest and Southwest closer to $24–$33.
  • Class B (3 Star): about $38/SF, with 13.1% vacancy.
  • Class C (1–2 Star): about $34/SF, with 11.6% vacancy.

Notice the pattern: the newest, most expensive buildings have the highest vacancy, yet they’re where the absorption is happening. That’s the flight to quality — and the concessions on that space are still generous.

Where the deals are

Downtown is still the most expensive address in the market at about $60/SF asking, with a fifth of it vacant. East Austin is next at about $50, and it carries the highest vacancy in the city at 28%. The Domain and North Austin sit around $47 with 12.6% vacancy. For value, look west and north: Northwest Austin quotes about $38.50 and absorbed more space over the past year than any other submarket, and Round Rock is the tightest of Austin’s major submarkets at under 5% vacancy.

The big signatures this year tell the same story. Jackson Walker and Virtu Financial took a combined 170,000 SF at The Republic downtown, Renesas signed 95,000 SF at San Clemente in the Southwest, and Qualcomm committed to 66,000 SF at Parmer Business Park. On the sales side, One Eleven Congress traded for $208 million in July and 405 Colorado went for $151 million — about $733 a foot for a new downtown tower. Buyers are back for the right assets.

What this means for you

If you’re a tenant, this is still your market, but the easy part is ending. Vacancy above 15% means landlords are still competing for good credit with free rent and TI dollars — especially in the newer buildings. With almost nothing new coming behind Waterline, though, the best blocks of quality space will get thinner through 2027. If your lease expires in the next 12–18 months, start now while you have options.

If you’re an owner, absorption is real, and the pipeline drying up works in your favor. But tenants are shopping hard, and the buildings that lease are the ones priced honestly and marketed actively. Well-positioned space is moving. Quietly-listed or overpriced space is not.

What the averages can’t tell you is your building, your block, and your timing. If you want a read on your specific situation — what your space should rent for, or what you should be paying — that’s the question we answer every day.

Source: CoStar Austin Office Market Report, data as of September 16, 2026. See our Austin Office Market guide for the full rate and vacancy picture, or browse office space by area: Downtown, Central, North & Domain, Northwest, South, Southwest, East, Cedar Park & Round Rock.

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The Austin Office Market in Q1 2026: Vacancy Turns a Corner

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For the first time in more than three years, Austin’s office vacancy rate fell on a year-over-year basis. After a long stretch of soft demand, that’s a real shift — and worth unpacking if you’re deciding whether to sign, renew, or list this year.

Here’s where things stand, with the numbers courtesy of CoStar’s Q1 2026 Austin office report.

The market at a glance

  • Vacancy: 15.7% — down sharply from the prior quarter, and the first annual decline since 2022. Still historically high, but finally moving the right way.
  • Net absorption: about 2.6 million SF over the past year — a dramatic jump from roughly 180,000 SF the year before. Tenants are taking space again.
  • Asking rents: ~$42/SF full-service on average, up about 1% year over year. Rents are holding, not spiking.

A big piece of the vacancy drop was a single deal: the 1.1-million-SF Highpoint campus sold to an owner-user and came off the market. So some of the improvement is mechanical. But the demand underneath it is genuine — NXP, xAI, and Samsung all signed significant space this cycle.

What it costs, by building class

  • Class A (4–5 Star): ~$51/SF asking. Downtown and the Domain run $38–$46/SF NNN, with trophy towers pushing ~$53. In the Northwest and Southwest suburbs, comparable 4-Star space is closer to $24–$33/SF NNN.
  • Class B (3 Star): ~$37/SF.
  • Class C (1–2 Star): ~$33/SF.

The gap between downtown and the suburbs is about as wide as I’ve seen it. The right submarket can change your rent by 40% or more for a similar-quality building.

What this means for you

If you’re a tenant, you still have leverage. Vacancy above 15% means landlords are competing for good credit, and concessions like free rent and TI dollars are on the table — but that window narrows as absorption picks up. If your lease is up in the next 12–18 months, start now.

If you’re an owner, the improving demand is encouraging, but pricing discipline still matters. Well-positioned, well-marketed space is leasing. Overpriced or quietly-listed space is sitting.

What the averages can’t tell you is your building, your block, and your timing. If you want a read on your specific situation — what your space should rent for, or what you should be paying — that’s the question we answer every day.

Source: CoStar Austin Office Market Report, Q1 2026.

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“Survive until 25!”

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Editor’s note (July 2026): Market conditions have changed since this was published. Austin office vacancy is now 15.7% and falling — see our latest Austin office market update.

This is the new unofficial mantra of the real estate industry.

Here’s why:

1. Interest Rates

The Federal Reserve has effectively put the breaks on our inflation (and economy) and may have just pulled off the “soft landing” with the stock market looking reasonably healthy. But higher interest rates impact affordability and many buyers are sitting on the sidelines until the current rates become “normal” or they see a rate or price improvement that gives them a reason to act. Either way, I see the majority of tenants/buyers waiting until 2025 to get in the game and start making long-term decisions like signing a 7-year lease or buying office buildings.

2. Navigating Economic Uncertainty

The softening economy, job market, and potential recession have business leaders and employees being cautious about big real estate decisions.

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3. Looking Ahead to the 2024 Presidential Election

The presidential contest has a unique knack for stirring up conflict and uncertainty that permeates our society. The potential policy shifts that a new administration could bring hold the power to substantially impact businesses. Consequently, many organizations find themselves in a temporary holding pattern, observing the election’s outcome before charting their course of action. Once a decision is reached at the polls, the economy and bigger real estate decisions are set back into motion.

4. Expectations

Buyer and seller do not see values the same way right now. Sellers/Landlords still have recent memories of their record-high property valuations and are not ready to let that dream die so soon. Properties listed at prices based on Cap rates of 5% don’t make any sense when money costs 7.5% to borrow. Buyers/Tenants are looking for a price that factors in the higher borrowing costs and vacancy in the market. This gap in expectations means fewer transactions getting done.

5. Slow Return to Work

Covid sent everyone home with a laptop and the way we use office space has shifted forever. The return to the office with hybrid schedules has been sluggish at best. The return to the office is going to need to be led by the big companies establishing the new work normal. I believe office occupancy will improve over time but will never quite be the same. (Those leasing office space will find sublease discounts galore!)

Amidst an environment of uncertainty, buyers and tenants lean towards indecision, deliberate contemplation, or short-term decisions. For those in the real estate industry, the wise path appears to be one of resilience and patience, with a focus on navigating to the promising horizon of 2025.

Survive until ’25, yall!

Vacancy vs. Availability and What This Means for Tenants

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Editor’s note (July 2026): Market conditions have changed since this was published. Austin office vacancy is now 15.7% and falling — see our latest Austin office market update.

CoStar office stats for Austin are looking ugly. The vacancy rate is at 30.6% and the availability rate at 40.2% (Which adds occupied space that is also being marketed as available in the near future like subleases, direct leases expiring, and new construction). Pricing typically lags vacancy by ~18 months but we have yet to see price declines in the market except for subleases.

Landlords are still using free rent and extra tenant improvements to keep those face rates high. The big block spaces are getting hit the hardest as small tenants seem to be the most active.

What this means for tenants is that there are a lot of good discounts and opportunities in the market!

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Office space demand is shifting to short-term

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We’ve noticed a growing trend toward short-term leases. It seems that more and more tenants are requesting one-year terms when three to five years used to be the norm. While the current economic uncertainty is certainly a factor, we believe there’s a larger societal shift at play.

We’re living in an age where on-demand services like Netflix, Airbnb, Amazon Prime, and Uber are programming us to think short-term. We’re becoming accustomed to the idea that we can have whatever we want, whenever we want it. This mindset is starting to spill over into our business decisions, and it’s not very compatible with the majority of the existing office leasing inventory. Most office space is designed, priced, and marketed for long-term commitments (5 or more years) and stable cash flow for landlords. Some owners are leaning into this emerging trend with move-in-ready suites, shorter terms, and simplified lease forms, but I think the demand for flexibility and a fast, streamlined leasing process is far outstripping supply.

Why use a Tenant representation firm?

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Using a tenant representation firm can offer a number of benefits when looking for office space to lease. Some of the main reasons to consider using a tenant representation firm include:

  1. Expertise: Tenant representation firms have specialized knowledge and experience in the commercial real estate market. They can help you understand the local market conditions and identify properties that meet your specific needs and budget.
  2. Access to a Wide Range of Properties: Tenant representation firms have access to a wide range of properties, including those that may not be actively advertised on the open market. This can increase your chances of finding the perfect space for your business.
  3. Negotiating Power: Tenant representation firms have the skills and experience to negotiate the best terms for your lease. They can help you understand the lease agreement, identify potential issues and work with the landlord to make sure you are getting the best deal possible.
  4. Time-Saving: Searching for office space can be a time-consuming process. A tenant representation firm can save you time by identifying properties that fit your needs, scheduling tours and handling negotiations on your behalf.
  5. Cost-effective: Tenant representation firms are typically paid by the landlord and not the tenant, so you can use their services for free.
  6. They can help you identify potential issues with the property, such as zoning laws, parking, utilities, etc.

It is important to remember that tenant representation firms represent your interests and they will work to find the best possible space that fits your needs and budget, so you can focus on running your business.aos blog posts

Are Remote Work Policies Changing?

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The recent poor financial performance of tech companies is giving corporate leaders a reason to bring employees back to the office… even if just for a couple of days a week.

Everyone who comes into the office will expect their “own desk” so I don’t think office sizes can change that much. The reduction in office size will be from scaled-back headcount and some permanent remote employees that don’t need an office presence.

Read more at this article on Costar

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Will Remote Workers Be Forced to Go Back to the Office Soon?

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This survey shared by Costar shows the feelings of employees about where they work. screenshot 2022 12 15 at 9.48.52 am

Even though I go to the office almost every day and enjoy being there, I guess I would have said “Hybrid” for myself because I work a portion of most mornings at home. I am sure employees want to keep the freedom that they have become accustomed to. The harsh reality is that employers are going to be making layoff decisions based on relationships and those who demonstrate they want to work.

Here is a paraphrased quote from a client that shows an employer perspective: “Rumors out here are Q1 is going to be super rough, which actually will help in a weird way as people will realize they need to hang on to their jobs. Then CEOs will get back in control of the company. I ended up laying off people earlier this year because they were just not working or had a real sense of entitlement. The tide is turning.”

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Thoughts?

How to Prepare to Fill Office Vacancies

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The best strategy for office landlords with vacancies is to speculatively build out spaces and get them move-in ready, be flexible with the lease term, and offer aggressive incentives to land every prospect that is serious about their space.

What adjustments are you (or your industry) making right now?

Leasing Incentives On The Rise

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Editor’s note (July 2026): Market conditions have changed since this was published. Austin office vacancy is now 15.7% and falling — see our latest Austin office market update.

screen shot 2022 12 06 at 2.55.53 pmAn Austin landlord suddenly loaded up the incentives to entice one of our clients to move forward with their Class B, suburban office space. This included 4 months of free base rent on the front of a 64-month lease and an increase in their tenant improvement allowance from $20 per SF to $35 (which is a very generous allowance for 2nd generation space). The total in new concessions for our client was around $100,000 or 4.5%.

This was an aggressive change in strategy in the several months of negotiation. We believe that this Landlord is ahead of the pack in making the adjustments needed in the slowing office leasing environment ahead. Another reason for the concession is the Landlord has 2 other spaces of almost identical size vacant in their project. Getting this space leased before the holidays, in advance of a slowing market is the right strategy… and a big win for our client!

Notice that I didn’t say they lowered the base rent… because they didn’t. It is still within $.50 of the rate that was originally quoted with 3% annual increases. This high rental rate is locked in for 5 years and preserves the building’s value for the future. The levers that landlords will use to lure tenants in this downturn will be front-loaded discounts like free rent, tenant improvements, and moving allowances.

Negotiation is of course hyper-local. If a building owner with 100% occupancy is negotiating an office renewal, their rate flexibility will be a product of their desperation. A small building owned by an individual with 50% vacancy will likely have more urgency to collect rent than a large REIT owned office tower. Understanding the leverage of an individual Landlord is important as we coach our clients to the best decisions.

#negotiation #leasing #incentives #recession #officespace #officeleasing #austin #austintx