Austin Commercial Office Space for Rent
Q4 2025
Austin, TX Commercial Real Estate Market Report
The Austin commercial real estate market in the third quarter of 2025 is defined by a sharp divergence between a struggling office sector and a resilient retail market, while the industrial sector works through a significant supply wave [1].
- Office Sector: The office market remains tenant-favorable as vacancy rates hover near record highs [1, 5]. However, demand for high-quality space ("flight to quality") is evident, with Class A properties capturing the vast majority of leasing activity [1, 5].
- Industrial Sector: Vacancy has climbed to a two-decade high of 13.3%, driven by an "unprecedented wave" of speculative big-box development that has outpaced demand for six consecutive quarters [4].
- Retail Sector: This sector is the market's bright spot, characterized by tight vacancy and positive absorption, supported by Austin's sustained population growth [2, 8].
Key Market Metrics
Key Metric Austin Trend (Q3 2025) National Context
Economic Driver Job growth remains positive (2.2% annualized in August), led by government, education, and health services [1]. Austin is growing faster than both Texas and the U.S. average [1].
Office Vacancy ~24.7% (Overall) to 27.7% depending on the report [1, 6]. Significantly higher than the national average, offering tenants massive leverage.
Industrial Supply 15.3 Million SF under construction [4]. The fourth-largest construction pipeline in the nation [4].
Retail Strength Vacancy is extremely low at ~3.2% - 3.3% [2, 8]. Among the 10 lowest vacancy rates for major U.S. markets [8].
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Office Space Analysis
The Austin office market saw a mix of signals in Q3 2025. While some reports show net absorption turning positive (driven by a few large move-ins like Vista Equity Partners), the overall vacancy rate remains elevated [1]. Leasing activity is down year-over-year, and the construction pipeline has dropped significantly, which may help stabilize supply in the long term [1].
Metric Austin Performance (Q3 2025) Trend
Overall Vacancy Rate ~23.6% - 27.7% [1, 5] High but showing signs of stabilization (down 10-20 bps QOQ) [1, 6].
Average Asking Rent (FS) ~$44.86 - $45.12 per SF [1, 5] Record high, driven by expensive Class A deliveries [1].
Sublease Space ~4.0 Million SF [1] Trending downward (decreased 1.8% QOQ) [1].
Under Construction ~185,641 SF [1] Pipeline has shrunk by over 90% [1].
Tenant Search Deals (Last 90 days) 14.1% of total searches [9] Proprietary Data [9].
Deep Dive: TenantBase Office Demand Profile
Office deals accounted for 14.1% of all tenant searches on the platform [9]. The data reveals a market dominated by smaller tenants seeking flexibility:
Lease Term Share of Total Office Deals (Last 90 Days) Average Size Requirement (SF Range)
Less than one year 37.1% [9] 1,312.5 SF to 2,687.5 SF [9]
2-3 Years 22.9% [9] 2,000 SF to 4,000 SF [9]
3-5 Years 17.1% [9] 1,000 SF to 2,500 SF [9]
5+ Years 17.1% [9] 6,000 SF to 12,000 SF [9]
- Key Trend: Tenants seeking terms of "Less than one year" make up the largest share of activity (37.1%), reflecting caution and a desire for flexibility [9].
- Size Variance: There is a stark contrast in size requirements; tenants willing to sign 5+ year leases are looking for spaces three times larger (6,000+ SF) than short-term tenants [9].
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Warehouse/Industrial Space Analysis
Austin's industrial market is softening. Vacancy has reached 13.3% - 18.4% depending on the asset class measure, largely due to a massive supply of new unleased buildings [4, 7]. However, the market has recorded its 45th consecutive quarter of positive net absorption, proving that demand exists—it just cannot keep pace with the aggressive construction [7].
Metric Austin Performance (Q3 2025) Trend
Overall Vacancy Rate ~13.3% - 18.4% [4, 7] Sharp increase (up 330 bps YOY) due to speculative development [4].
Average Asking Rent ~$14.26 (NNN) per SF [4] Rents are softening or turning negative due to competition [4, 7].
Net Absorption (Q3) ~475,000 - 860,000 SF (Positive) [4, 7] Positive, but insufficient to offset new supply [4].
Under Construction ~7.0 - 15.3 Million SF [4, 7] Robust pipeline, though starts have dropped to 4-year lows [7].
Tenant Search Deals (Last 90 days) 33.3% of total searches [9] Proprietary Data [9].
Deep Dive: TenantBase Industrial Demand Profile
Industrial/Warehouse searches represent 33.3% of total activity [9]. Unlike office tenants, industrial tenants are more willing to commit to mid-length terms.
Lease Term Share of Total Industrial Deals (Last 90 Days) Average Size Requirement (SF Range)
1-2 Years 31.8% [9] 1,416.67 SF to 4,166.67 SF [9]
3-5 Years 31.8% [9] 5,333.33 SF to 10,833.33 SF [9]
2-3 Years 22.7% [9] 3,200 SF to 7,900 SF [9]
- Key Trend: The "3-5 Years" term is tied for the most popular choice, indicating more operational stability than the office sector [9].
- Size Preference: The average size requirement for 3-5 year deals is roughly 5,300 to 10,800 SF, aligning with the "small-bay" product that is currently outperforming big-box distribution centers [9].
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Retail/Storefront Space Analysis
Retail is the strongest performer in Austin commercial real estate. Net absorption rose nearly 50% in Q3 2025 compared to the previous quarter [2]. With a vacancy rate of just 3.3%, landlords maintain pricing power, and new construction is finally ramping up to meet the demand [2, 8].
Metric Austin Performance (Q3 2025) Trend
Overall Vacancy Rate ~3.2% - 3.3% [2, 8] Extremely tight; among the lowest in the U.S. [8].
Average Asking Rent (NNN) ~$25.96 per SF [2] Stable/Flat over the quarter [2].
Net Absorption (Q3) ~416,566 SF (Positive) [2] Up 48.4% QOQ; led by grocers and fitness centers [2].
Under Construction ~2.7 Million SF [2] Increasing (up 63% YOY) to meet pent-up demand [2].
Tenant Search Deals (Last 90 days) 53.3% of total searches [9] Proprietary Data [9].
Deep Dive: TenantBase Retail Demand Profile
Retail/Storefront searches are the dominant volume on the TenantBase platform, making up 53.3% of all searches [9].
Lease Term Share of Total Retail Deals (Last 90 Days) Average Size Requirement (SF Range)
3-5 Years 29.7% [9] 1,666.67 SF to 2,966.67 SF [9]
2-3 Years 20.3% [9] (No Data) [9]
Less than one year 18.8% [9] 500 SF to 1,000 SF [9]
5+ Years 17.2% [9] 1,000 SF to 4,750 SF [9]
- Key Trend: Retail tenants are the most likely to search for longer terms, with nearly 30% seeking 3-5 year leases [9].
- Space Usage: The high volume of "Less than one year" and small SF searches (500-1,000 SF) suggests a vibrant market for pop-up shops and small independent boutiques [9].
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Coworking and Flexible Space Analysis
Metric Austin Performance (Last 90 Days) Trend
Standard Lease Terms No deals to show [9] Tenants are likely utilizing on-demand apps or month-to-month memberships rather than formal leases [9].
Average SF Requirement ~237.5 SF to 475 SF [9] Very small requirements, typical of individual users or 2-person teams [9].
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Emerging Sector Deep Dive: Technology & AI Infrastructure
While office demand has fluctuated, Austin remains a critical hub for technology. The tech sector is currently pursuing over 1.5 million square feet of space [5]. Furthermore, data center demand is accelerating, driven by AI infrastructure needs, although this specific sector faces power and land constraints similar to other major hubs [1, 5].
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Source List
Austin Office Q3 2025 Quarterly Market Report - Partners Real Estate
https://partnersrealestate.com/research/austin-office-q3-2025-quarterly-market-report/
Austin Retail Q3 2025 Quarterly Market Report - Partners Real Estate
https://partnersrealestate.com/research/austin-retail-q3-2025-quarterly-market-report/
Austin Commercial Real Estate Market Report - ECR
https://www.ecrtx.com/austin/market-report/
Austin Industrial Market Report Q3 2025 - Matthews
https://www.matthews.com/market_insights/austin-tx-industrial-market-report-q3-2025
Austin Office Figures Q3 2025 - CBRE
https://www.cbre.com/insights/figures/austin-office-figures-q3-2025
Austin Q3 2025 Office Market Report - Savills
https://www.savills.us/research_articles/256536/381684-0
Austin Industrial Figures Q3 2025 - CBRE
https://www.cbre.com/insights/figures/austin-industrial-figures-q3-2025
Austin Retail Market Report Q3 2025 - Marcus & Millichap
https://www.marcusmillichap.com/research/market-report/austin/austin-3q25-retail-market-report
TenantBase (Internal Data - Tenant Searches)
(Proprietary Data)
Information in this report is aggregated from various third-party sources and synthesized using artificial intelligence and other research tools. While we believe these sources to be reliable, we cannot guarantee the absolute accuracy or completeness of the data. This report is intended for informational purposes to provide market insight and should be independently verified prior to any use in a real estate transaction or legal commitment.