SOURCE: Austin Business Journal

After several quarters of relatively low absorption, Austin's office property market is picking up steam.

Companies leased about 245,181 square feet of office space during the third quarter, up from just 35,835 square feet in the previous quarter, according to the latest report from Austin-based Oxford Commercial.

With roughly 2 million square feet of new, mostly Class A, product recently delivered or in the works, the new figures may allow developers to breathe a sigh of relief.

"There's been a lot of discussion on why our absorption has been so low despite the job creation figures and other factors," says Rick Whiteley, senior vice president with Oxford focusing on tenant representation. "I think the absorption numbers this quarter are going to be received very warmly" by developers.

The citywide occupancy rate among all classes of space stands at 86.2 percent, roughly the same as it was for third quarter 2006. But the market has added about 1.2 million square feet to the inventory roll in the last year, indicating a significant amount of vacant product has been absorbed.

Rents meanwhile have gone up considerably.

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