Austin is the capital city of Texas and the 11th most populous city in the United States. The city straddles the picturesque Colorado River and is home to many parks and recreational activities. Its growing economy and thriving tourism industry makes Austin a good choice for nearly any type of business. For small businesses in particular, Austin was named the #1 place in America to start a business by CNBC and ranked the #1 city in the U.S. to start a small business by American City Business Journals . This is largely due to the supportive community at the heart of Austin's culture, where you'll find fellow small entrepreneurs help each other out, often with out any immediate benefit to themselves.
With an unofficial slogan of “Keep Austin Weird,” the diverse population has fostered a community-wide commitment to support local and small businesses. The growing startup culture has drawn tech companies of all sizes and offers a “Silicon Valley” environment at a fraction of the cost. A combination of historic properties and new development makes the commercial office market full of options to suit all tenants searching for space.
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Downtown Austin’s explosion in popularity and demand has done wonders for the equally innovative areas of The Domain and The Arboretum. Home to many of the largest and most forward-thinking companies in the world, both areas are now synonymous with Austin’s unique spirit, diverse corporate footprint, and a keen eye on the future.
While The Arboretum is essentially full without much room left for additional construction, the same is definitely not true for The Domain. The area is undergoing dramatic changes with even more expansion directly adjacent to The Domain. A new soccer stadium at McKalla Place in 2021 will further transform the immediate area as part of Austin's overall initiative to be a trendsetting, forward-looking city.
Downtown Austin has become a significant tech hub in recent years as companies like Facebook, Indeed, Google, and several others now have a considerable presence in the neighborhood. Large medical corporations also occupy much of the northern side of Downtown while Parsley Energy is set to lease a 300,000 SF, 31-story building in 2020.
The office space in the area reflects the nature and stature of Downtown’s tenants. The over 9 million SF of Class A space represents over half of Downtown Austin’s total commercial space. The area also features roughly 5 million sq ft of Class B and over 2 million SF of Class C space. A growing coworking space movement is also gaining steam in Downtown to meet the evolving demands of modern business.
Everything from tech companies and creative firms to gastropubs and coffee houses line the streets of East Side. It’s an eclectic mix of businesses that creates a warm and innovative spirit within the neighborhood. Older and dense portions of East Side are transforming into apartment buildings with first floor retail and a burgeoning coworking scene that suites the area well.
The density of East Side’s commercial real estate means companies won’t find any large office buildings or complexes but numerous smaller spaces instead. Most of the available commercial space is less than 5,000 SF at rents around $30 SF but price points can vary greatly depending on location and other factors. Parking is sparse as most businesses rely on street parking or small, dedicated lots. The few private garages currently under construction will significantly improve area parking for local companies in the coming years.
The South Congress neighborhood of Austin is loosely defined as the area hugging South Congress Avenue between South Lamar and I-35. A diverse and somewhat nontraditional assortment of office space types matches that eclectic collection of businesses found in SoCo. Vacancy rates run low in densely populated South Congress so many companies and retailers are moving into those nontraditional buildings.
The many amenities in South Congress define much of Austin’s spirit and can be a powerful draw for talent into the area. SoCo is home to numerous restaurants, bars, and coffee houses that help give the area its relaxed vibe and unique culture. Residents and employees also have easy access to Zilker Park where they can enjoy ACL, Trail of Lights, and other entertainment venues throughout the year. Zilker Park and Town Lake also play host to numerous hike and bike trails that give the SoCo workforce a convenient way to enjoy Austin’s incredible natural environment.
The southwest portion of Austin is synonymous with some of the most renowned tech-oriented companies in modern industry. The majority of the commercial space is Class A and averages 30,000 SF. Price points for Class A office space in Southwest Austin fall around $40+ SF and $35 for Class B. Most of these office parks, as well as the growing number of retailers in the area, offer ample parking as part of the lease terms. Companies can typically expect five parking spaces for every 1,000 SF of office space.
Much of the change seen across Southwest Austin centers around a 380,000 SF mixed-use development called Lantana Place. The project will add roughly 60,000 SF of high-end retail, dining, and medical space to the area upon completion to provide a more well-rounded commercial atmosphere for local businesses and residents alike. New family-unit residential communities are also a part of Lantana Place to cater to the work-life balance so crucial to today’s workforce.
Both The Domain and The Arboretum have a distinctly tech-oriented and trendy feel to them. The Arboretum is home to many technology and professional firms while The Domain features large facilities for companies like Facebook, Amazon, Indeed, and Trend Micro. Space in The Arboretum is primarily older Class A with a wide variety of tenants as well as significant retail space. The average size in The Arboretum is about 7,000 sq ft with approximately 10 properties over 20,000 sq ft. Rents average about $21 per square foot.
The Domain features bigger and newer properties that are mostly new construction Class A and vertical mixed-use. Commercial space averages about 20,000 sq ft at rents of $30 per square foot. The Domain also offers high-end retail and traditional mixed-use space so the area serves a variety of companies and industries well. The industrial segment of both The Arboretum and The Domain are combined with the North and Northwest areas of Austin. Parking is relatively easy in both neighborhoods with open lots and parking garages available throughout each. Approximately 90% of leases including parking in some capacity.