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