Austin Office Rents Now Rival Silicon Valley's Amid Tech Growth

AUSTIN, TX — The continual expansion of large tech companies in Austin has yielded exponentially higher rents now rivaling those of Silicon Valley in San Francisco, according to a new report.

Forbes magazine reports that, according to research by commercial real estate brokerage firm JLL, the "big 8" tech firms had either committed or actually occupied 9.2 million square feet of space in the capital city by the end of June. While JLL doesn't name the "big 8" firms in the high technology sector, the elite group includes Apple, Google, Facebook, Oracle and Amazon.

The growing local presence of the industrial behemoths represents a nearly eight-fold increase than the comparable 1.2 million square feet in the fourth quarter of 2014.

“In 2014, over 1 billion square feet came online and that was spoken for very quickly,” Bre Brown, a vice president and tenant rep for JLL in Austin, noted in the report. “The same thing has been happening over the last couple of years. As soon as new product becomes available, it’s quickly being taken by big tech companies. They’re all competing for space.”

The brisk pace of growth has heightened the level of office rent building owners now command — a surge of 43.7 percent to $45.22 in the first quarter of 2019 compared to $31.47 in the fourth quarter of 2018, according to the analysis. Much f that growth has been seen in the past year alone, according to the report — up 17 percent by this year's first quarter versus $38.65 in the comparable period last year, JLL reported.

Austin's vacancy rates have shrunk amid the growth to about 12 percent in the first quarter compared to a level of 13.6 percent for the same period in San Francisco's Silicon Valley, a global tech hub, JLL reported.

>>> Read the full story at Forbes