NEW YORK – (Realty News Report) – Texas and Florida dominated the rankings of the top office markets in the nation, according the National Association of Realtors’ Commercial Market Insights report released Monday.
Since the second quarter of 2020, vacancy rates have declined for multifamily, industrial and retail properties.
Compared to one year ago, asking rents climbed for multifamily (11%), industrial (7%) and retail (2%) properties, but declined for office properties (-0.4%).
Texas and Florida have a large share of the strong commercial markets in the third quarter, NAR reported.
The Top Ten
In alphabetical order, the Top 10 markets are:
- Austin, Texas
- Boise, Idaho
- Chattanooga, Tennessee
- Daytona Beach, Florida
- Miami, Florida
- Myrtle Beach, South Carolina
- Omaha, Nebraska
- Palm Beach, Florida
- Provo, Utah
- San Antonio, Texas
Austin’s Boom
Hines, a Houston-based developer, recently announced it has several new Austin projects in the pipeline, including T3 Eastside, a mass timber office and residential building will consist of 92,000 SF of office and 9,200 SF of residential space featuring 15 loft-style residential units.
Austin’s New Google Building Designed by Pelli Clarke Pelli
“Hines is a strong believer in Austin’s economy, talented workforce, cost effectiveness and quality of living, and the world’s most innovative companies have recognized this and will look for office buildings that match their unique culture and standards,” said John Mooz, senior managing director and Austin city head at Hines.
“Hines has over 64 years of experience in Texas, and we look forward to growing our presence in Austin with several projects that will be announced in the coming months covering multiple product types,” said Mooz.
Also in Austin, Trammell Crow is developing a 35-story tower fully leased by Google. Lincoln Property Company and Stream Realty also have major towers underway in downtown Austin.
In a major transaction, Kilroy Realty Corp. recently acquired the Indeed Tower in downtown Austin for $580 million. Indeed Tower, completed in May, is a 36-story office project totaling 730,000 SF.Developed by Trammell Crow, the Indeed tower sits on a full city block bounded by West Sixth, West Seventh, Colorado, and Lavaca
Stronger Rents
For NAR’s national survey, NAR analyzed 390 commercial real estate markets and found a robust recovery with positive net absorption and strengthening rents across the multifamily, industrial and retail property markets as economic production rebounds to pre-pandemic levels. The apartment and industrial sectors, specifically, are reporting historically low vacancy rates, while retail has undergone a more gradual recovery as consumers continue their return to brick-and-mortar shopping.
The office sector, however, continues to struggle, as absorption rates and rents have declined and many occupied spaces remain largely void of workers. Positive indicators have been noted in small- and medium-sized metropolitan areas, which are seeing increases in office occupancy rates that outperform most large cities and the national average.
Office Market Lagging, Says NAR Chief Economist Lawrence Yun
“Even as the economy makes a steady recovery, the one sector still lagging behind has been the office market,” said NAR Chief Economist Lawrence Yun. “Work-from-home flexibility looks to be the defining shift of the new post-pandemic economy.
“Despite the overall challenges, however, some local markets are bucking the trend with more office occupancy and rising rents. A combination of strong in-migration and relatively lower cost of doing business is driving these growth markets.”
Sept. 27, 2021 Realty News Report Copyright 2021
For more about Texas real estate, check out the book Houston 2020: America’s Boom Town – An Extreme Close Up by Ralph Bivins. Available on Amazon http://tiny.cc/4a2g6y
Houston 2020 Ebook version https://tinyurl.com/4xm7z8b5
Images: High-rise construction in downtown Austin. Photos by Ralph Bivins of Realty News Report Copyright 2021.
Caption (1) (top photo) The 6 x Guadalupe, under construction at 400 West Sixth in Austin will be one of the tallest buildings in Texas. Developed by Lincoln Property Company with Kairoi Residential. the 66-story tower will have 590,000 SF of office; 389 multifamily units and 10,000 SF of ground-floor retail.
File: Top Ten Markets Ranked