austin market report q3 2015
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A U S T I NMARKETR E P O R T
3Q 2015
AQUILAKNOWSAUSTIN
KEEPING YOU INFORMEDAQUILA Commercial is dedicated to
providing quality service to our clients.
We understand that real time market data
helps our clients make smart, informed real
estate decisions. This report is produced
and distributed quarterly. To receive our
updates, opt in at aquilacommercial.com.
DISCLAIMER This report utilizes various
real estate and economic data sources. The
information contained herein is confidential
and proprietary in nature. No warranties or
guarantees are made as to the accuracy of
the information contained herein.
Hartland Plaza; Photo by Scott Mason Photography
323 2015 AQUILA Austin Market Report
Last quarter, the Austin Market Report focused on
development in the Austin office market. This quarter
we are going to delve deeper into the underpinning of
the development, as well as the overall Austin office
real estate market, by focusing on the Austin economy.
As the following pages will illustrate, the overall Austin
office market remains very healthy. Since the beginning
of 3Q 2014, Austin has added 2,154,010 sf of net rentable
area. 2,156,761 sf were absorbed over this same period,
justifying the latest wave of deliveries. The citywide
vacancy rate is now 10.86% and the overall market
average asking Class A full service rental rate is at an
all-time high of $36.36/sf (see AQUILA’s breakdown of
average as-is full service rental rates versus full service
rates in this quarter’s Special Report on pages 5–7) .
Austin’s population growth is among the fastest in the
nation. Between 2010 and 2014, the city’s population
grew by 13.2%, far exceeding the state of Texas (7.2%)
and the U.S. (3.3%) rates1. Between 2010 and 2013, out of
the fifty major markets in the country, Austin ranked first
in net migrants as a percentage of total population with
5.8% (or 109,744 people) of the total 2013 population.
Only two other metros exceeded 4% in this category2.
Also worth noting, nearly 50% of new migrants to Austin
arrived from outside of Texas.
Austin’s residential real estate market is benefitting from
the city’s growth. Earlier this year, WalletHub created a
study comparing 25 of the largest metro areas across
ten metrics indicating the well-being of their housing
markets. Austin came in sixth overall, with two of the
highlights being: third lowest in “underwater” mortgages
and eighth highest in home equity/loan value ratio. As of
August 2015, FreddieMac’s Multi-Indicator Market Index
has Austin as the second most stable housing market in
the U.S.
VIEW FROMTHE
EAGLE’S NESTRYAN PARZICK
Market Research Director
AQUILA Commercial
parzick@aquilacommercial.com
4
According to the Austin Chamber of Commerce, the
Austin metropolitan area added 29,300 jobs between
September 2014 and September 2015, a 3.2% increase.
This percentage change ranked Austin eleventh out of
the top fifty metros in the country. Of these jobs, 10,200
were in the Professional & Business Services category,
the category within which workers are most likely to
occupy office space. Over the same time period, Austin
unemployment decreased by 26.2%, which leaves the
Capital City with a seasonally adjusted unemployment rate
of 3.2%. The 3.2% unemployment rate is the lowest rate in
the top fifty metros in the U.S.
Basing our analysis on the PricewaterhouseCoopers/
Thomson Reuters/NVCA MoneyTreeReport that tracks
venture capital nationwide, there have been 57 venture
capital deals in Austin this year through 2Q 2015. This
value is the highest for the first two quarters of a year
recorded since 2005, which is when our data began to be
broken down on a quarterly basis. These 57 deals netted
$429.64 million for local firms in two quarters, which puts
the city on pace to top the highest yearly total since 2002
($716.18 million raised in 2007).
Another indicator signaling the health of a metro area
is Gross Domestic Product (GDP). The U.S. Bureau of
Economic Analysis shows that Austin had the third highest
change of large metro areas in real GDP from 2013 to
2014, while also having the second highest change in real
GDP from 2009 to 2014.
All of the indicators analyzed above point toward Austin
having a strong underlying foundation for its commercial
real estate market to continue to expand. Our proprietary
model, which powers our AQUILA projection graphs
for each major submarket (located at the end of each
submarket section in this report), illustrates the positive
effect of the strong economy on vacancy rates and
rental rates over the next two years using scenarios of
conservative (1%) and aggressive (3%) job growth.
HISTORICAL SNAPSHOT OF AUSTIN OFFICE SPACE
Quarter Net Rentable Area Direct Available SF Net Absorption* Direct & Sublease Vacancy Rate
Average Class A Full Service Rental Rate
2013 Q4 42,444,966 4,960,873 (14,664) 12.14% $33.32
2014 Q1 42,444,966 4,815,598 167,798 11.74% $33.47
2014 Q2 42,475,999 4,647,525 6,277 11.79% $33.44
2014 Q3 42,720,370 4,373,103 377,613 11.41% $33.67
2014 Q4 42,784,115 4,068,526 420,985 10.56% $34.78
2015 Q1 43,665,210 4,612,974 383,535 11.49% $36.27
2015 Q2 44,534,490 4,795,149 585,639 11.90% $35.60
2015 Q3 44,874,380 4,650,151 766,602 10.86% $36.36
* Absorption includes sublease space. Numbers based on CBRE statistics.
1 US Census Bureau. “2014 Population Estimates Program.”01 July 2014. Web. 12 October 2015.
2 Ramser, Chris. “Central Texas Economy in Perspective.” 18 November 2014. Austin Chamber of Commerce. 12 October 2015.
ALL OF THE INDICATORS ANALYZED ABOVE POINT TOWARD AUSTIN HAVING A STRONG UNDERLYING FOUNDATION FOR ITS COMMERCIAL REAL ESTATE MARKET
TO CONTINUE TO EXPAND.
ECONOMIC INDICATORCHECK BOXES:
R Population GrowthR Healthy Housing MarketR Job ExpansionR Strong Venture Capital InvestmentR Robust Gross Domestic Product
523 2015 AQUILA Austin Market Report
RENTAL RATES ARE RISING...AREN'T THEY?
According to Turner Construction’s Building Cost Index, which measures costs in the non-residential building
construction market nationwide, there has been an 11.8% increase in construction costs since 1Q 2013. This
index includes labor rates and productivity, material prices, and the competitive condition of the marketplace.
The Houston market (data for Austin is not tracked) has seen a 14.3% increase in standard office space buildout
between 2013 and 2015, according to Kirksey Architecture’s Construction Cost Update. By contrast, full service
rental rate growth in Austin, TX over the same period was a comparable 13.9%. But, for a truly local analysis,
AQUILA compared face rates and effective rates over the last 24 months to better understand rate dynamics in
each of the city’s major submarkets.
METHODOLOGYOur analysis examined lease comps for our competitive set of buildings (see Appendix) in the major Austin submarkets
(CBD, NW, and SW) that commenced January 1, 2013 through the end of 2015. To make sure that leases similar in
nature were being compared, only new leases were included in this study. Excluding renewals eliminated the
variability associated with the general practice of owners signing leases with conventionally lower tenant improvement
allowances (TIs) than those offered to new tenants for a new space. A similar study we conducted, which included
renewals and expansions, netted similar results on a less dramatic scale. Considering the rising costs of construction,
which generally affects new leases more, we felt it prudent to only concentrate on the new leases in this report to show
a clearer picture. This filtering netted 333 leases used in the study (CBD: 100, NW: 125, and SW: 108).
Two calculations were made for each lease and compared to each other:
• Average Full Service (FS) Rate. This rate is the average total annual payment made by the tenant over the course
of the lease term, measured in dollars per square foot. Rent abatement and operating expenses are included.
• Average As-Is Full Service (FS) Rate. This rate prorates the TIs over the term of the lease and subtracts them
from the Average FS Rate.
Keeping the operating expenses in both calculations maintains a better “apples-to-apples” comparison while illustrating
what tenants are paying out of pocket. The two calculations for each lease were plotted on a graph at the corresponding
lease’s commencement date and a regression line was inserted to show the behavior of the rates over time.
This quarter, in light of the 14 quarters of rent growth in Austin over the last 16 quarters, the AQUILA Market Research Department set out to achieve a more holistic understanding of this growth, taking into account all factors, especially the ongoing rise in construction pricing.
6
RESULTSIn Graph 1, the trendlines show the
disparity between the rates becoming
smaller around the beginning of 2014, but
more than doubling less than two years
later. When broken down into submarkets,
the same held true to different degrees,
with the exception of the NW submarket
where the variance was roughly the same.
The gap illustrates the difference in the
Average FS Rate and the Average As-Is
FS Rate, which can be translated into the
amount an owner is providing in TIs.
There are a number of explanations that
can account for the cause of these trends:
1. Construction costs are increasing across
the board. The more it costs tenants to
build out their space, the less likely many
tenants will be able to afford to move into
nicer buildings. Owners don’t want to
lose the long term income by foregoing
upfront costs in the term of additional TIs.
2. New product in individual submarkets
come in different flavors. As noted before,
the CBD and SW submarkets followed the
trend of the majority of the overall Austin
market, whereas the NW bucked the
trend. The recent new deliveries in Austin
adhered to the traditional principles of the
$15
$20
$25
$30
$35
$40
$45
$50
$55
Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15
Rent
al R
ate
($/s
f)
Average FS Rate Average As-Is FS Rate Average FS Rate Trendline Average As-Is FS Rate Trendline
$2.99 $2.57
$5.74
Graph 1: Citywide Avg. Full-Service vs. Avg. As-Is Full-Service Rental Rates
$25
$30
$35
$40
$45
$50
$55
Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15
Rent
al R
ate
($/s
f)
Average FS Rate Average As-Is FS Rate Average FS Rate Trendline Average As-Is FS Rate Trendline
$3.56
$3.48
$6.92
Graph 2: CBD Avg. Full-Service vs. Avg. As-Is Full-Service Rental Rates
723 2015 AQUILA Austin Market Report
submarkets. Downtown and SW buildings are superior products, whereas the NW has more traditional space. The need for higher-end
improvements drives up the tenant buildout costs. To entice users to come to these new buildings, owners have been increasing their
concessions. In the NW, owners can still increase their rental rates due to the hot market, but do not have to worry about giving as much
money for improvements for standard space. Additionally, many tenants that have been priced out of the CBD and SW submarkets tend
to do deals in the NW and will stick to a more budget-friendly rent while also forgoing pricey improvements to their space.
3. Existing product is not immune to submarket trends. Coinciding with the development tendencies, the CBD and SW submarkets have
seen more inflation with purchases of existing product than the NW submarket. Because of this higher $/sf for the purchase, landlords
need to charge higher rental rates to support recent acquisition prices. Again, to lure tenants to these expensive spaces, higher tenant
improvement allowances are a tool owners have been effectively using. For the most part, NW submarket properties have been
consistently filling up so the market is healthy, but there are significantly more “large availabilities” out there compared to the other
submarkets. This risk to investors coupled with a large number of available product in the submarket, dictates a lower $/sf on purchases.
The lower purchase price translates to
owners being able to ask for lower rental
rates than the CBD and SW in a submarket
where cost-conscious tenants are already
attracted.
WHAT DOES THIS MEAN FOR YOU?Tenants:
You should expect to keep paying more
in rent than you would have a year ago,
but you can expect a nominally larger
tenant improvement allowance. Even
with increased tenant improvement
funds, you will likely see the achievable
scope of work for your tenant finish is not
necessarily going to be any greater than it
would have been a year ago.
Landlords:
There are underlying market forces
that are pushing for more concessions
in your leases. Is it more important to
save a couple dollars per square foot in
upfront allowances or to charge more in
rent over the life of the lease? Though
revenue continues to increase, landlords
are having to pay more out of pocket to
tenants.
$15
$20
$25
$30
$35
$40
$45
Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15
Rent
al R
ate
($/s
f)
Average FS Rate Average As-Is FS Rate Average FS Rate Trendline Average As-Is FS Rate Trendline
$2.63
$3.03
$2.95
Graph 3: Northwest Avg. Full-Service vs. Avg. As-Is Full-Service Rental Rates
$15
$20
$25
$30
$35
$40
$45
Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15
Rent
al R
ate
($/s
f)
Average FS Rate Average As-Is FS Rate Average FS Rate Trendline Average As-Is FS Rate Trendline
$2.92$1.59
$6.33
Graph 4: Southwest Avg. Full-Service vs. Avg. As-Is Full-Service Rental Rates
8
AUSTIN CITYWIDE3Q UPDATE
766,602 SFNet Absorption
10.86% Direct & Sublease Vacancy Rate
$36.36Avg. Class A Full Service Rental Rate
3Q 2015 had another 339,890 sf of new product come
online, which is a drop from the robust additions the
previous two quarters posted (869,280 sf and 881,095 sf),
but still significant nonetheless. With a strong 766,602 sf
of positive absorption this quarter coupled with the lower
delivery number, Austin saw its total vacancy rate drop to
10.36% from last quarter’s 10.77% rate. This quarter also
saw Austin’s Class A full service asking rates increase to
$36.36, continuing the overall upward trend of higher rates
in 14 out of the last 16 quarters.
The Texas State Capitol; Photo Courtesy of: Anthony Quintano
923 2015 AQUILA Austin Market Report
MOVING OUTThe following large users left for
new spaces or downsized.
PEARSON EDUCATIONvacated 33,945 sf at Travesia
Corporate Park III after
determining to consolidate its four
Austin locations into one.
SCOTT, DOUGLAS, MCCONNICOleft 23,127 sf in 600 Congress and
moved into 40,303 sf in Colorado
Tower (also within the CBD).
MAJOR LEASES SIGNED Leases signed this quarter over 25,000 sf:
CBD• RetailMeNot renewed its existing 95,537 sf at 301 Congress and expanded
by another 4,518 sf.
• Cirrus Logic signed a 84,872 sf lease that helped kick off construction at Shoal Creek Walk. The company will be moving its entire office from 300 W 6th St to the new building upon delivery in 3Q 2017.
• Gerson Lehrman Group renewed and expanded at 301 Congress. They now have a total of 41,803 sf.
• AllClear ID renewed and expanded in 823 Congress to come to a total of 33,720 sf.
• TechSpace entered the Austin market by leasing 28,190 sf in San Jacinto Center.
• Spanning Cloud Apps signed a lease for 20,391 sf in 501 Congress.
SOUTHWEST• Logitech renewed and expanded in Two Barton Skyway to occupy a total
of 99,047 sf.
NORTHWEST• Electronic Arts renewed 100,787 sf at 7700 Parmer Bldg C and expanded
by another 74,681 sf within the same building.
• Dun & Bradstreet Corporation signed a 61,471 sf lease at 7700 Parmer Bldg A.
• Oracle expanded by 56,334 in 7700 Parmer Bldg B to add to their current 123,567 sf of space.
• Motion Computing signed a lease for 32,319 sf in Park Centre Building II.
SUBMARKETMAP
CBD
Central
East/Northeast
North
Northwest
Round Rock
South/Southeast
Southwest
10
SNAPSHOT:CAPITAL MARKETSMAJOR SALES TRANSACTIONSMultiple transactions involving large portfolios were on the books for 3Q 2015, with two such transactions occurring
adjacent to each other (the Domain and Broadmoor portfolios). Additionally, two downtown buildings (501 Congress and
515 Congress) were split and sold by the same owner in separate transactions.
Market CBD
Class A
Size (SF) 122,551
Buyer AFIAA Swiss Foundation
Seller Stream Realty Partners
Price $41,213,093
Price/SF $336.29
Notes Purchase of building and adjoining parking garage; total price including the parking garage was $79,100,000
501 CONGRESS SOLD515 CONGRESSSOLD
Market CBD
Class A
Size (SF) 258,176
Buyer KBS
Seller Stream Realty Partners
Price Undisclosed
Price/SF Undisclosed
CANYON HILLS OFFICE CENTER
Market NW
Class B
Size (SF) 68,604
Buyer Gemini Rosemont Commercial Real Estate
Seller Rosemont Realty
Price $11,331,389
Price/SF $165.17
SOLD CAPITAL RIDGE
Market SW
Class A
Size (SF) 216,511
Buyer Miller Global Properties
Seller Riverside Resources
Price Undisclosed
Price/SF Undisclosed
SOLDWESTLAKE PLACE
Market SW
Class B
Size (SF) 60,338
Buyer Moore & Associates
Seller Berns Commercial Properties
Price $11,900,000
Price/SF $197.22
SOLD
515 Congress
1123 2015 AQUILA Austin Market Report
SOLD AMBER OAKS CORPORATE CENTER
Market NW
Class A
Size (SF) 644,344
Buyer Menlo Equities
Seller CBRE Global Investors
Price $116,000,000
Price/SF $180.03
BROADMOOR CAMPUS
Market NW
Class A
Size (SF) 1,095,848
Buyer Brandywine Realty Trust
Seller IBM Corp
Price $338,632,000
Price/SF $309.01
Notes Buyer bought the remaining 50% interest in this 7 building portfolio. (They already bought a 50% interest last year.) Price includes purchase of Bldgs. A-G as well as an allocated value to excess land on Bldg. F parcel. Buyer plans to develop on the excess land in the future.
SOLDDOMAIN PORTFOLIO
Market NW
Class A
Size (SF) 696,322
Buyer TIER REIT
Seller RREEF
Price $201,100,000
Price/SF Undetermined
Notes Domain 3 & 4 (179,006 sf and 152,012 sf, respectively) were purchased outright, Domain 2 & 7 (143,331 sf and 221,973 sf, respectively) were acquired at 50% ownership, and 24 acres of developable land was also in the deal.
SOLD
MAJOR PORTFOLIOS
801 BARTON SPRINGSIn August 2015, a partnership between Austin-based
Generational Commercial Properties and Houston-based
HTZ Investments purchased the 34,000 square foot site
located at 801 Barton Springs in Austin, Texas. The new
owners will construct an office building featuring 90,500 SF
office and a 1,800 SF restaurant. Four stories of office will sit
atop four and a half levels of parking and feature stunning
views of the downtown Austin skyline and greenbelt. Learn
more about this project at 801BartonSprings.com.
12
AUSTIN OFFICE DEVELOPMENT PIPELINE
4Q
Research Park Plaza V 172,854 SF Northwest
Encino Trace II 158,137 SF Southwest
Quarry Oaks III 137,615 SF Northwest
Lamar Central 131,722 SF Central
Aspen Lake Two 129,000 SF Northwest
1Q
5th + Colorado 179,000 SF CBD
Eastside Village 94,500 SF East
Lakes at TechRidge - Bldg. C 39,400 SF East
NorthShore 23,592 SF CBD
2Q
905 & 906 Broadmoor* 345,000 SF Northwest
La Frontera Plaza 97,941 SF Round Rock
Domain 5 74,787 SF Northwest
*Already existing--coming to market 2Q 2016
4Q
Domain 8 255,000 SF Northwest
3Q
Braker Point III† 195,230 SF Northwest
The Diamond Building at Mueller
37,305 SF East
†Already existing--coming to market 3Q 2016
This timeline shows office projects over 30,000 SF that have either broken ground or will be breaking ground soon and
the estimated year and quarter of delivery.
2015 2016 2017 planned
1323 2015 AQUILA Austin Market Report
1Q
500 W 2nd 489,404 SF CBD
Future Developments
10721 Domain Dr. 308,000 SF Northwest
310 Comal 37,500 SF East
405 Colorado TBD SF CBD
604 W 6th Street 31,035 SF CBD
Amber Oaks Phase I 90,300 SF Northwest
Amber Oaks Phase II 90,300 SF Northwest
Amber Oaks Phase III 45,000 SF Northwest
Aspen Lake Three 128,700 SF Northwest
Cityline at MLK 150,000 SF East
Four Points Centre Building 3 250,000 SF Northwest
Four Points Centre Building 4 80,000 SF Northwest
Frontera Ridge 400,000 SF Round Rock
Lantana Ridge I 87,500 SF Southwest
Lantana Ridge II 87,500 SF Southwest
Mueller Market District 2,000,000 SF East
Novare/Post Office TBD SF CBD
Paloma Ridge C 112,500 SF Northwest
Plaza Saltillo 125,000 SF East
Rainey Gateway 355,000 SF CBD
Regency Park 90,000 SF Southwest
Rollingwood Center III 107,000 SF Southwest
St. Elmo 225,000 SF South
The Backyard - Bldgs. B, J, & H 171,450 SF Southwest
The Lakes at TechRidge - Bldg. A 48,800 SF East
The Lakes at TechRidge - Bldg. B 48,800 SF East
The Park @ Mueller 116,000 SF East
The Terrace 3 203,130 SF Southwest
The Terrace 4 285,663 SF Southwest
The Terrace 5 218,809 SF Southwest
The Waterfront 625,000 SF South
Third + Shoal 338,279 SF CBD
Waller Creek Center 325,000 SF CBD
3Q
Shoal Creek Walk 218,432 SF CBD
2015 2016 2017 planned
2Q
801 Barton Springs 90,500 South
14
232,375 SFNet Absorption
7.83%Direct & Sublease Vacancy Rate
$44.17/SFAvg. Class A Full Service Rental Rate
CENTRALBUSINESSDISTRICT
3Q UPDATEVacancy rates fell dramatically across all
classes of buildings in the CBD from 2Q 2015
to this quarter, dropping 237 basis points
from 10.20% to 7.83%. This was mirrored
in our competitive set of buildings (Class
A buildings located in, or near, the core
of downtown), in which the vacancy rate
dropped from an already low 8.03% even
further to 6.32%. To highlight how much
the CBD submarket has tightened over the
course of a year, the vacancy rate of the
competitive set of buildings in 3Q 2014 was
9.70% with 639,036 less sf of rentable space.
1523 2015 AQUILA Austin Market Report
Class A asking full service rental rates climbed for the overall
CBD submarket, increasing from $41.90/sf to $44.17/sf.
With the exception of last quarter's anomalous drop, rental
rates have continuously grown since 2Q 2014. The 3Q 2015
value continues this trend. The competitive set of buildings
saw a fourteenth consecutive quarter of positive change in
this category, swelling almost a full dollar to $48.70/sf from
last quarter’s $47.74/sf. Again, to emphasize the demand
for CBD office space, the asking full service rental rate in
3Q 2014 was $45.13/sf for the competitive set, $3.57/sf less
than it is today.
There were not any new deliveries this quarter in the CBD,
but Shoal Creek Walk broke ground and is projected to be
completed by 3Q 2017. This development will have 218,432
sf of leasable office space and is already 39% preleased to
Cirrus Logic. Two new buildings – 5th + Colorado (179,000
sf, 26% preleased) and NorthShore (23,592 sf, 100%
preleased) – should be completed in 1Q 2016 and 500 W
2nd (489,404 sf, 42% preleased) is on track to be delivered
1Q 2017.
Only two existing buildings have blocks of available space
above 20,000 sf this quarter, down from six buildings last
quarter. The projects in development are also slowly losing
large blocks of space as more leases are being signed in
these buildings. As the CBD continues to draw users and
businesses are expanding, this is a limiting scenario for
companies looking to grow downtown or move into the
CBD.
TO EMPHASIZE THE DEMAND FOR CBD OFFICE SPACE, THE ASKING FULL
SERVICE RENTAL RATE IN 3Q 2014 WAS $45.13/SF FOR THE COMPETITIVE SET,
OVER $3.50 LESS THAN IT IS TODAY.
Lobby at 301 Congress; Photo courtesy of Commonwealth Partners
16
CBD BY THE NUMBERS
Quarter Net Rentable Area Direct Available SF Net Absorption* Direct & Sublease Vacancy Rate
Average Class A Full Service Rental Rate
2013 Q4 9,084,414 1,045,081 6,826 12.00% $41.61
2014 Q1 9,084,414 1,032,112 17,164 11.81% $41.45
2014 Q2 9,084,414 1,021,461 (13,728) 11.96% $40.88
2014 Q3 9,252,285 1,041,014 153,098 11.90% $41.39
2014 Q4 9,252,285 802,517 227,661 9.44% $43.13
2015 Q1 9,768,770 1,135,835 139,236 12.81% $43.83
2015 Q2 9,809,755 870,240 291,638 10.20% $41.90
2015 Q3 9,809,755 672,222 232,375 7.83% $44.17
CBD SUBMARKET
AVAILABLE SF VS. VACANCY RATE NET ABSORPTION
VACANCY RATES VS. RENTAL RATES
* Absorption includes sublease space. Numbers based on CBRE statistics.
0%
3%
6%
9%
12%
15%
18%
$39.00
$40.00
$41.00
$42.00
$43.00
$44.00
$45.00
Vaca
ncy
Rate
Rent
al R
ate
Average Class A Full Service Rental Rate Direct & Sublease Vacancy Rate
83%
84%
85%
86%
87%
88%
89%
90%
91%
92%
93%
(50,000)
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 2015 Q3
Occ
upan
cy R
ate
Abso
rptio
n (S
F)
Net Absorption* Direct & Sublease Occupancy Rate
0%
2%
4%
6%
8%
10%
12%
14%
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 2015 Q3
Vaca
ncy
Rate
Avai
labi
lity
(SF)
Direct Available SF Sublease Available SF Direct & Sublease Vacancy Rate
1723 2015 AQUILA Austin Market Report
AUSTIN CBD OFFICE RENTAL RATE PROJECTIONS
AUSTIN CBD OFFICE VACANCY RATE PROJECTIONS
7.5
8.0
8.5
9.0
9.5
10.0
10.5
11.0
0%
5%
10%
15%
20%
25%
30%
35%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Mar
ket S
ize
(Mill
ions
of S
F)
Tota
l Vac
ancy
Rat
e (%
)
Market Size Historic Vacancy Rate AQUILA Model 1% Job Growth 3% Job Growth
3% Job Growth
1% Job Growth
Shoal Creek Walk
500 W 2nd
5th + ColoradoNorthShore
$15
$20
$25
$30
$35
$40
$45
$50
$55
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Full
Serv
ice
Rent
al R
ates
($)
Historic Rental Rate AQUILA Model 1% Job Growth 3% Job Growth
3% Job Growth
1% Job Growth
18
CBD DEVELOPMENT& LARGE AVAILABILITY
OFFICE UNDER CONSTRUCTIONHOTEL/RESIDENTIAL UNDER CONSTRUCTIONFUTURE DEVELOPMENTSEXISTING AVAILABILITIES
6th Street
5th Street
Barton Springs Rd.
N. L
amar
Blv
d.
Cong
ress
Ave
.
11th Street
S. 1
st S
tree
t
Cesar Chavez St.
6th Street6th Street6th Street
5th Street
5th Street
5th Street
Barton Springs Rd.
Barton Springs Rd.
Barton Springs Rd.
N. L
amar
Blv
d.
N. L
amar
Blv
d.
N. L
amar
Blv
d.
Cong
ress
Ave
.
Cong
ress
Ave
.
Cong
ress
Ave
.
11th Street11th Street11th Street
S. 1
st S
tree
t
S. 1
st S
tree
t
S. 1
st S
tree
t
Cesar Chavez St.
Cesar Chavez St.
Cesar Chavez St.
500 W. 2nd
Northshore
TheIndependent
ShoalCreekWalk
604 W.Sixth
Novare/Post Office
OneCongressPlaza
FairmontHotelWallercreekcenterRaineyGateway
AustinAmericanStatesman801 BartonSprings
San JacintoCenter
Hotel Zaza/Gables 5th +Colorado
5th &West
third +shoal
Aloft & element
holiday Inn& hotel indigo
Hyatthouse hotel
405Colorado
70Rainey
the austin properGreen waterresidential tower
1923 2015 AQUILA Austin Market Report
Building Available SF Max. Contiguous
One Congress Plaza 72,848 SF 23,479 SF
San Jacinto Center 40,207 SF 20,286 SF
OFFICE UNDER CONSTRUCTIONHOTEL/RESIDENTIAL UNDER CONSTRUCTIONFUTURE DEVELOPMENTSEXISTING AVAILABILITIES
6th Street
5th Street
Barton Springs Rd.
N. L
amar
Blv
d.
Cong
ress
Ave
.
11th Street
S. 1
st S
tree
t
Cesar Chavez St.
6th Street6th Street6th Street
5th Street
5th Street
5th Street
Barton Springs Rd.
Barton Springs Rd.
Barton Springs Rd.
N. L
amar
Blv
d.
N. L
amar
Blv
d.
N. L
amar
Blv
d.
Cong
ress
Ave
.
Cong
ress
Ave
.
Cong
ress
Ave
.
11th Street11th Street11th Street
S. 1
st S
tree
t
S. 1
st S
tree
t
S. 1
st S
tree
t
Cesar Chavez St.
Cesar Chavez St.
Cesar Chavez St.
500 W. 2nd
Northshore
TheIndependent
ShoalCreekWalk
604 W.Sixth
Novare/Post Office
OneCongressPlaza
FairmontHotelWallercreekcenterRaineyGateway
AustinAmericanStatesman801 BartonSprings
San JacintoCenter
Hotel Zaza/Gables 5th +Colorado
5th &West
third +shoal
Aloft & element
holiday Inn& hotel indigo
Hyatthouse hotel
405Colorado
70Rainey
the austin properGreen waterresidential tower
Building % Preleased Total SF Est. Delivery
500 W 2nd 42% 489,404 SF 1Q 2017
5th + Colorado 26% 179,000 SF 1Q 2016
NorthShore 100% 23,592 SF 1Q 2016
Shoal Creek Walk 39% 218,432 SF 3Q 2017
Units/Rooms Est. Delivery Max. Contiguous
5th & West 154 Units 4Q 2017
Aloft & Element 422 Rooms 3Q 2017
Fairmont 1,066 Rooms 3Q 2017
Hotel Indigo/Holiday Inn Express 300 Rooms 4Q 2015
Hyatt House Hotel 190 Rooms 4Q 2016
NorthShore 436 Units 1Q 2017
The Austin Proper 250 Rooms, 120 Units 2Q 2017
Units/Rooms Est. Delivery Max. Contiguous
405 Colorado TBD Office
604 W 6th Street 31,035 SF Office
801 Barton Springs 90,500 SF Office
Austin American Statesman TBD Office
Novare/Post Office TBD Office
Rainey Gateway 355,000 SF Office
Third + Shoal 338,279 SF Office
Waller Creek Center 325,000 SF Office
70 Rainey 164 Units Multifamily
Green Water Residential Tower TBD Multifamily
The Independent 370 Units Multifamily
Hotel Zaza/Gables 226 Units, 160 Rooms Hotel/Multifamily
LARGE BLOCKS OF CONTIGUOUS AVAILABILITY
OFFICE PROJECTS UNDER CONSTRUCTION
OTHER PROJECTS UNDER CONSTRUCTION
FUTURE/PLANNED DEVELOPMENTS
20,000 SF + of available space
20
Central Business District AUSTIN, TXQ3 2015 CLASS A AVAILABILITY SUMMARY
SUBLEASE SPACE
AVAILABLE SPACE
23
22
21
20
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
1,421 SF 7,081 SF
300 W 6th 300 W 6th St.
454,225 SF23 Floors
99% Leased$54.42 Gross
33
32
31
30
29
28
27
26
25
24
23
22
21
20
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
8,881 SF
Frost Bank Tower 401 Congress Ave.
535,078 SF33 Floors
98% Leased$57.25 Gross
13
12
11
10
9
8
7
6
5
4
3
2
1
IBC Bank Plaza500 W 5th St.
194,749 SF13 Floors
100% Leased$43.60 Gross
30
29
28
27
26
25
24
23
22
21
20
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
23,479 SF
1,761 SF
23,142 SF
5,818 SF
7,432 SF
11,216 SF
One Congress Plaza111 Congress Ave.
518,385 SF30 Floors
86% Leased$46.69 Gross
21
20
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
19,921 SF
20,286 SF
San Jacinto Center 98 San Jacinto Blvd.
406,279 SF21 Floors
90% Leased$50.15 Gross
21,218 SF
21,218 SF
21,218 SF
21,218 SF
21,218 SF
21,218 SF
Shoal Creek Walk835 W 6th St.
218,432 SF14 Floors
42% Pre-Leased$49.50 Gross
30
29
28
27
26
25
24
23
22
21
20
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
Colorado Tower303 Colorado St.
373,334 SF30 Floors
100% Leased$48.49 Gross
21
20
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
16,711
Chase Tower221 W 6th St.
389,503 SF21 Floors
96% Leased$48.90 Gross
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
465 SF
7,322 SF
5,004 SF
3,659 SF
875 SF
963 SF 3,520 SF
846 SF 1,716 SF
Austin Centre701 Brazos St.
326,335 SF16 Floors
95% Leased$43.88 Gross
20
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
5,275 SF
10,821 SF
816 Congress 816 Congress Ave.
434,081 SF20 Floors
96% Leased$45.59 Gross
32
31
30
29
28
27
26
25
24
23
22
21
20
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
8,335 SF
8,936 SF
3,545 SF
8,860 SF
600 Congress 600 Congress Ave.
503,951 SF32 Floors
94% Leased$48.80 Gross
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
19,000 SF
19,000 SF
8,000 SF
19,000 SF
19,000 SF
19,000 SF
19,000 SF
4,000 SF
5th + Colorado 201 W 5th St.
179,000 SF18 Floors
19% Pre-Leased$50.20 Gross
26
25
24
23
22
21
20
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
1,385 SF
1,455 SF
1,223 SF
6,914 SF
515 Congress515 Congress Ave.
258,176 SF26 Floors
96% Leased$47.95 Gross
5
4
3
2
118,922 SF
501 Congress501 Congress Ave.
122,747 SF5 Floors
85% Leased$47.23 Gross
29
28
27
26
25
24
23
22
21
20
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
31,051 SF
32,603 SF
32,603 SF
32,603 SF
33,931 SF
31,822 SF
31,822 SF
31,530 SF
23,500 SF
500 W 2nd 500 W 2nd St.
489,404 SF29 Floors
42% Pre-Leased$52.00 Gross
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
17,218 SF
6,432 SF
2,195 SF
400 W 15th400 W 15th St.
281,196 SF17 Floors
97% Leased$40.42 Gross
22
21
20
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
2,809 SF
10,712 SF
6,593 SF
7,887 sf
100 Congress100 Congress Ave.
411,536 SF22 Floors
93% Leased$55.65 Gross
7,142 SF
6,796 SF
1620 SF
4,669 SF
301 Congress301 Congress Ave.
418,338 SF22 Floors
95% Leased$51.45 Gross
22
21
20
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
CBD CLASS A AVAILABILITY SUMMARY
2123 2015 AQUILA Austin Market Report
Central Business District AUSTIN, TXQ3 2015 CLASS A AVAILABILITY SUMMARY
SUBLEASE SPACE
AVAILABLE SPACE
23
22
21
20
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
1,421 SF 7,081 SF
300 W 6th 300 W 6th St.
454,225 SF23 Floors
99% Leased$54.42 Gross
33
32
31
30
29
28
27
26
25
24
23
22
21
20
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
8,881 SF
Frost Bank Tower 401 Congress Ave.
535,078 SF33 Floors
98% Leased$57.25 Gross
13
12
11
10
9
8
7
6
5
4
3
2
1
IBC Bank Plaza500 W 5th St.
194,749 SF13 Floors
100% Leased$43.60 Gross
30
29
28
27
26
25
24
23
22
21
20
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
23,479 SF
1,761 SF
23,142 SF
5,818 SF
7,432 SF
11,216 SF
One Congress Plaza111 Congress Ave.
518,385 SF30 Floors
86% Leased$46.69 Gross
21
20
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
19,921 SF
20,286 SF
San Jacinto Center 98 San Jacinto Blvd.
406,279 SF21 Floors
90% Leased$50.15 Gross
21,218 SF
21,218 SF
21,218 SF
21,218 SF
21,218 SF
21,218 SF
Shoal Creek Walk835 W 6th St.
218,432 SF14 Floors
42% Pre-Leased$49.50 Gross
30
29
28
27
26
25
24
23
22
21
20
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
Colorado Tower303 Colorado St.
373,334 SF30 Floors
100% Leased$48.49 Gross
21
20
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
16,711
Chase Tower221 W 6th St.
389,503 SF21 Floors
96% Leased$48.90 Gross
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
465 SF
7,322 SF
5,004 SF
3,659 SF
875 SF
963 SF 3,520 SF
846 SF 1,716 SF
Austin Centre701 Brazos St.
326,335 SF16 Floors
95% Leased$43.88 Gross
20
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
5,275 SF
10,821 SF
816 Congress 816 Congress Ave.
434,081 SF20 Floors
96% Leased$45.59 Gross
32
31
30
29
28
27
26
25
24
23
22
21
20
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
8,335 SF
8,936 SF
3,545 SF
8,860 SF
600 Congress 600 Congress Ave.
503,951 SF32 Floors
94% Leased$48.80 Gross
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
19,000 SF
19,000 SF
8,000 SF
19,000 SF
19,000 SF
19,000 SF
19,000 SF
4,000 SF
5th + Colorado 201 W 5th St.
179,000 SF18 Floors
19% Pre-Leased$50.20 Gross
26
25
24
23
22
21
20
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
1,385 SF
1,455 SF
1,223 SF
6,914 SF
515 Congress515 Congress Ave.
258,176 SF26 Floors
96% Leased$47.95 Gross
5
4
3
2
118,922 SF
501 Congress501 Congress Ave.
122,747 SF5 Floors
85% Leased$47.23 Gross
29
28
27
26
25
24
23
22
21
20
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
31,051 SF
32,603 SF
32,603 SF
32,603 SF
33,931 SF
31,822 SF
31,822 SF
31,530 SF
23,500 SF
500 W 2nd 500 W 2nd St.
489,404 SF29 Floors
42% Pre-Leased$52.00 Gross
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
17,218 SF
6,432 SF
2,195 SF
400 W 15th400 W 15th St.
281,196 SF17 Floors
97% Leased$40.42 Gross
22
21
20
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
2,809 SF
10,712 SF
6,593 SF
7,887 sf
100 Congress100 Congress Ave.
411,536 SF22 Floors
93% Leased$55.65 Gross
7,142 SF
6,796 SF
1620 SF
4,669 SF
301 Congress301 Congress Ave.
418,338 SF22 Floors
95% Leased$51.45 Gross
22
21
20
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
22 7700 Parmer; Photo by Third Eye Photography
2323 2015 AQUILA Austin Market Report
NORTHWEST SUBMARKET3Q UPDATE
276,295 SFNet Absorption
9.96%Direct & Sublease Vacancy Rate
$33.26/SFAvg. Class A Full Service Rental Rate
The vacancy rate for all classes of buildings in the
Northwest (NW) submarket fell from 11.56% to 9.96%. This
is in contrast to our competitive set of buildings (newer
suburban office buildings that typically have structured
parking, amenities such as conference rooms, workout
facilities and/or delis*), which rose from 9.00% last quarter
to 10.64% this quarter. The conflicting trajectory of the
vacancy rates between our competitive set and the overall
Northwest submarket data can be explained by the fact
that the overall numbers come from CBRE’s data which
does not take into account Paloma Ridge A & B – two Class
A buildings that delivered this quarter.
*See full list of competitve set buildings in the appendix.
24
NORTHWESTSUBMARKET UPDATE
The Paloma Ridge buildings combine for 212,400 sf of new
rental space that is 100% vacant. The additional unleased
space in the competitive set of buildings raises the vacancy
rate from 9.19% without Paloma Ridge to 10.64% with
Paloma Ridge included in the set.
In addition to the vacancy rate discrepancy in the NW
submarket, there is also a difference in the absorption
rates between our competitive set and all classes of
buildings in the CBRE data. When a building delivers,
CBRE does not consider the leased space absorbed until
the tenant moves in. We do not consider the leased space
available in our competitive set, thereby treating the newly
supplied leased space as area that has been absorbed by
new tenants. Over 325,000 sf of new office space has been
built in the NW in 2015, much of which was occupied this
quarter. Looking back at the competitive set absorption
values, the previous two quarters had already accounted
for these new tenants.
Asking rental rates across all Class A buildings increased
for the seventh straight quarter, jumping from $32.74/sf
to $33.26/sf. The competitive set decreased this quarter,
falling to $33.55/sf from $33.83/sf. Six competitive
set buildings comprising of almost 400,000 sf in net
rentable area – all represented by the same brokerage
firm – drastically reduced asking rates this quarter by an
average of $8.85/sf, causing the overall asking rate of the
competitive set to drop. If these six buildings had the same
asking rate as last quarter, then the overall competitive
set would be at $33.81/sf. Additionally, there are 23
buildings (all but three in the competitive set) with over
20,000 sf available this quarter, jumping from seventeen
last quarter. These sizable vacancies in buildings could be
prompting landlords to lower their asking rates.
Other than Paloma Ridge in the Far Northwest micromarket,
there were not any new deliveries this quarter. Domain 8
kicked off construction this quarter and will bring 255,000
UFCU Plaza; Photo by: Scott Mason Photography
2523 2015 AQUILA Austin Market Report
sf to the Arboretum/Domain
micromarket in December
of 2016. Four new buildings
should be open for tenants in
4Q 2015: Domain 1 (124,557 sf
- December of 2015), Research
Park Plaza V (172,854 sf –
November 2015), Aspen Lake
Two (129,000 sf – October
2015), and Quarry Oaks III (137,615 sf – December 2015).
At the close of 3Q 2015, both Domain 1 and Research Park
Plaza V are 0% leased while Quarry Oaks III is 100% leased
to Bazaarvoice and Aspen Lake Two is 100% leased to Q2.
The Arboretum/Domain micromarket’s vacancy rate went
up and asking rental rate went down from last quarter,
though both values are still considered strong overall. The
asking rental rate for this micromarket could actually be
$34.90/sf (an increase over last quarter’s $34.77/sf rate)
if the six aforementioned buildings with dramatic asking
rate decreases had stayed the same. Instead, the asking
rental rate for Class A buildings lowered to $34.38/sf.
Additionally, the vacancy rate of 7.19% is still very healthy
and supports new development underway in the area.
The Shepherd Mountain
micromarket continues its
auspicious trend in both
vacancy rates and asking
rental rates. The asking
rental rates for Class A
buildings increased a
dime from $34.45/sf last
quarter. The vacancy
rate decreased from 12.41% to 12.26%. Both are subtle
changes, but still in the positive direction.
The Far Northwest micromarket welcomed Paloma Ridge
A & B this quarter. The 212,400 sf of unfilled space raised
the vacancy rate from last quarter’s 10.69% up to 15.48%.
Subtracting out Paloma Ridge, the micromarket actually
would have decreased its vacancy rate from last quarter to
10.61%. Paloma Ridge also affected the asking rental rates
for the Far Northwest micromarket. Instead of a $31.65/
sf asking rate (a cent lower than last quarter), the actual
asking rate is $31.42/sf. It would not be surprising to see
these trends continue since Research Park Plaza V is set
to be delivered next quarter and is 100% vacant as of the
end of 3Q 2015.
NORTHWESTMICROMARKETS
Arboretum/Domain
Far Northwest
Shepherd Mountain
ASKING RENTAL RATES ACROSS ALL CLASS A BUILDINGS INCREASED FOR THE SEVENTH STRAIGHT QUARTER, JUMPING
FROM $32.74/SF TO $33.26/SF.
26
NORTHWEST BY THE NUMBERSNORTHWEST OVERALL SUBMARKET PERFORMANCE
AVAILABLE SF VS. VACANCY RATE NET ABSORPTION
VACANCY RATES VS. RENTAL RATES
Quarter Net Rentable Area Direct Available SF Net Absorption* Direct & Sublease Vacancy Rate
Average Class A Full Service Rental Rate
2013 Q4 16,747,039 1,745,316 158,788 10.82% $27.33
2014 Q1 16,747,039 1,635,834 102,128 10.21% $29.20
2014 Q2 16,697,337 1,493,813 (12,658) 10.02% $29.89
2014 Q3 16,697,337 1,566,544 (103,939) 10.64% $30.65
2014 Q4 16,817,337 1,540,054 137,486 10.46% $30.83
2015 Q1 17,154,310 1,879,975 98,887 11.65% $32.06
2015 Q2 17,269,310 1,819,734 116,457 11.56% $32.74
2015 Q3 17,269,310 1,665,124 276,295 9.96% $33.26* Absorption includes sublease space. Numbers based on CBRE statistics.
0%
3%
6%
9%
12%
15%
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
2013Q4
2014Q1
2014Q2
2014Q3
2014Q4
2015Q1
2015Q2
2015Q3
Vaca
ncy
Rate
Avai
labi
lity
(SF)
Direct Available SF Sublease Available SF Direct & Sublease Vacancy Rate
85%
86%
87%
88%
89%
90%
91%
92%
93%
94%
(150,000)
(100,000)
(50,000)
0
50,000
100,000
150,000
200,000
250,000
300,000
2013Q4
2014Q1
2014Q2
2014Q3
2014Q4
2015Q1
2015Q2
2015Q3
Occ
upan
cy R
ate
Abso
rptio
n (S
F)
Net Absorption* Direct & Sublease Occupancy Rate
5%
7%
9%
11%
13%
15%
$25.00
$27.00
$29.00
$31.00
$33.00
$35.00
2013Q4
2014Q1
2014Q2
2014Q3
2014Q4
2015Q1
2015Q2
2015Q3
Vaca
ncy
Rate
Rent
al R
ate
Average Class A Full Service Rental Rate Direct & Sublease Vacancy Rate
2723 2015 AQUILA Austin Market Report
NORTHWEST SUBMARKET OFFICE RENTAL RATE PROJECTIONS
NORTHWEST SUBMARKET OFFICE VACANCY RATE PROJECTIONS
$15
$20
$25
$30
$35
$40
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Full
Serv
ice
Rent
al R
ates
($)
Historic Rental Rate AQUILA Model 1% Job Growth 3% Job Growth
3% Job Growth
1% Job Growth
10.0
11.7
13.3
15.0
16.7
18.3
20.0
0%
5%
10%
15%
20%
25%
30%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Mar
ket S
ize
(Mill
ions
of S
F)
Tota
l Vac
ancy
Rat
e (%
)
Market Size Historic Vacancy Rate AQUILA Model 1% Job Growth 3% Job Growth
3% Job Growth
1% Job Growth
Quarry Oaks IIIDomain 1Research Park Plaza VAspen Lake Two
905 & 906 BroadmoorDomain 5
Domain 8
Braker Pointe III
28
NORTHWEST AUSTINLARGE OFFICE AVAILABILITY
7
6
DOMAINArboretum
Pflugerville
Cedar Park Round Rock
LAKE TRAVIS
1819
1
11
14
15
13
10
20
17
Shepherd mountain
2
3
8
9
12
16
45
21
22
23
Building Direct Available SF Sublease Available SF Total Available SF
1 7700 Parmer - Bldg B 31,438 SF - 31,438 SF
2 7700 Parmer - Bldg C 23,693 SF - 23,693 SF
3 Amber Oaks F 78,034 SF - 78,034 SF
4 Amber Oaks G 9,923 SF 14,730 SF 24,653 SF
5 Amber Oaks J 6,245 SF 33,147 SF 39,392 SF
6 Atrium Office Centre 40,364 SF - 40,364 SF
7 Domain 3 - 20,816 SF 20,816 SF
8 Domain 7 31,000 SF - 31,000 SF
9 Ladera Bend 3 - 56,196 SF 56,196 SF
10 Lakewood Center I - 45,020 SF 45,020 SF
11 Paloma Ridge A 106,200 SF - 106,200 SF
12 Paloma Ridge B 106,200 SF - 106,200 SF
13 Park Centre Bldg. 3 57,562 SF - 57,562 SF
14 Research Park Number Five 39,237 SF - 39,237 SF
15 Plaza 7000 24,405 SF - 24,405 SF
16 Prominent Pointe I 24,342 SF - 24,342 SF
17 Research Park Place 8 33,518 SF - 33,518 SF
18 Riata Corporate Park Bldg 4 93,737 SF - 93,737 SF
19 Riata Corporate Park Bldg 5 23,783 SF - 23,783 SF
20 River Place Corp Park Bldg 7 - 21,477 SF 21,477 SF
21 Tech Center 2 22,295 SF - 22,295 SF
22 UFCU Plaza 25,161 SF - 25,161 SF
23 Travesia Corporate Park 1-3 33,555 SF 33,945 SF 67,500 SF
20,000 SF + of available space
2923 2015 AQUILA Austin Market Report
DOMAINArboretum
Pflugerville
Cedar ParkRound Rock
LAKE TRAVIS
Shepherd mountain
7
16
13
1112
1
6
10
3
2
5
4
81514
9
NORTHWEST AUSTINOFFICE DEVELOPMENT
Building Total SF Percent Preleased Estimated Delivery Status
1 Quarry Oaks III 137,615 100% 4Q 2015 Under Construction
2 Research Park Plaza V 172,854 0% 4Q 2015 Under Construction
3 Domain 1 124,557 0% 4Q 2015 Under Construction
4 Aspen Lake Two 129,000 100% 4Q 2015 Under Construction
5 Domain 5 74,787 0% 1Q 2016 Under Construction
6 905 & 906 Broadmoor* 345,000 0% 2Q 2016 Coming to Market
7 Braker Point III† 195,230 0% 3Q 2016 Coming to Market
8 Domain 8 291,000 0% 3Q 2017 Under Construction
9 10721 Domain Dr 308,000 0% Planned Planned
10 Amber Oaks Phase I 90,300 0% Planned Planned
11 Amber Oaks Phase II 90,300 0% Planned Planned
12 Amber Oaks Phase III 45,000 0% Planned Planned
13 Aspen Lake Three 128,700 0% Planned Planned
14 Four Points Centre Bldg. 3 250,000 0% Planned Planned
15 Four Points Centre Bldg. 4 80,000 0% Planned Planned
16 Paloma Ridge C 112,500 0% Planned Planned
Under Construction Planned
*Already existing - Coming to market 2Q 2016 †Already existing - Coming to market 3Q 2016
30 Dimensional Place, Building One; Photo courtesy of: Roy Niswanger
3123 2015 AQUILA Austin Market Report
SOUTHWEST SUBMARKET3Q UPDATE
121,673 SFNet Absorption
12.29%Direct & Sublease Vacancy Rate
$35.03/SFAvg. Class A Full Service Rental Rate
32
SOUTHWESTSUBMARKET UPDATE
Across all classes of buildings, the Southwest (SW)
submarket vacancy rate continued to be higher than
its traditional levels, changing from 12.21% last quarter
to 12.29% this quarter. As mentioned in last quarter’s
report, this larger value is likely due to the methodology
CBRE employs when collecting vacancy data. They count
leased space that has not been moved into as vacant,
hence “available.” Since we use CBRE’s data for the overall
market, this contradicts the dataset for the competitive set
buildings (newer suburban office buildings that typically
have structured parking, amenities such as conference
rooms, workout facilities, and/or delis). Capital Ridge,
Rollingwood I & II and 3700 San Clemente all delivered last
quarter in the SW submarket and the tenants are still in
the process of occupying. Capital Ridge is fully leased by
Apple, Rollingwood has 206,709 sf of 214,587 sf leased,
and 3700 San Clemente has 38% of 249,870 sf leased. All
of these leased spaces are considered vacant by CBRE’s
data until the tenants move in, but we do not consider
these spaces as available in our competitive set. In fact,
our competitive set of SW buildings decreased in vacancy
from 8.25% to 7.77%.
The asking rental rates for all Class A buildings in the SW
submarket increased by $1.27/sf this quarter, jumping up
from $33.76/sf to $35.03/sf. The competitive set saw an
increase in asking rental rates for the fifteenth consecutive
quarter, moving from $37.55/sf to $37.61/sf – an $8/sf
increase over the last fourteen quarters. Encino Trace I
delivered this quarter, adding 161,606 sf to the submarket.
This building is 100% preleased with ARM as its major
tenant. Encino Trace II will deliver next quarter. The 158,137
sf building is 15% preleased. No additional major projects
are under construction currently in SW Austin. We expect
Encino Trace; Photo courtesy of Brandywine Realty Trust
3323 2015 AQUILA Austin Market Report
to see the vacancy rate continue
to fall after a spike next quarter
from the mostly available Encino
Trace II as the SW submarket
remains a big draw for tenants
due to its unique views, access
and proximity to downtown,
desirable neighborhoods and a
rich talent-base.
The Near Southwest micromarket saw its overall vacancy
rate climb from 7.26% to 9.61%, but direct available
space actually decreased from last quarter. The recently
completed Rollingwood I was 100% preleased to EZCorp,
which put 102,108 sf back on the market for sublease. This
large sublease is skewing the total vacancy rate for this
micromarket. Mimicking the trend for the competitive set,
the Near Southwest micromarket has seen asking rental
rates increase every quarter since 2Q 2011, a staggering
18 quarters of consecutive escalations.
Vacancy rates declined
sharply this quarter
in the Far Southwest
micromarket, down
to 6.71% from an
abnormally high (for
this region) 8.85%. The
delivery of the 100%
leased Encino Trace I
aided in lowering this rate so dramatically. Last quarter a
number of new buildings were delivered, some of which
were not 100% preleased, causing a surge upwards in
the vacancy rate. Absorption is now catching up with this
vacancy. The full service asking rental rate dropped $0.08/
sf to $36.31/sf this quarter breaking a streak of 13 quarters
of rising rental rates.
SOUTHWESTMICROMARKETS
Far Southwest
Near Southwest
THE COMPETITIVE SET SAW AN INCREASE IN ASKING RENTAL RATES FOR THE FIFTEENTH CONSECUTIVE QUARTER, MOVING FROM $37.55/SF TO $37.61/
SF – AN $8/SF INCREASE OVER THE LAST FOURTEEN QUARTERS.
34
SOUTHWEST OFFICE BY THE NUMBERSSOUTHWEST OVERALL SUBMARKET PERFORMANCE
AVAILABLE SF VS. VACANCY RATE NET ABSORPTION
VACANCY RATES VS. RENTAL RATES
Quarter Net Rentable Area Direct Available SF Net Absorption* Direct & Sublease Vacancy Rate
Average Class A Full Service Rental Rate
2013 Q4 9,382,293 734,638 (204,816) 8.42% $32.50
2014 Q1 9,382,293 703,789 (22,457) 8.66% $31.19
2014 Q2 9,382,293 853,812 (150,296) 10.26% $30.72
2014 Q3 9,458,793 653,880 164,619 9.24% $31.38
2014 Q4 9,418,793 640,998 42,081 8.41% $34.87
2015 Q1 9,446,430 589,875 66,172 7.98% $34.35
2015 Q2 10,109,725 1,070,609 182,561 12.21% $33.76
2015 Q3 10,257,625 1,192,565 121,673 12.29% $35.03
* Absorption includes sublease space. Numbers based on CBRE statistics.
0%
2%
4%
6%
8%
10%
12%
14%
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
2013Q4
2014Q1
2014Q2
2014Q3
2014Q4
2015Q1
2015Q2
2015Q3
Vaca
ncy
Rate
Avai
labi
lity
(SF)
Direct Available SF Sublease Available SF Direct & Sublease Vacancy Rate
83%
84%
85%
86%
87%
88%
89%
90%
91%
92%
93%
(250,000)
(200,000)
(150,000)
(100,000)
(50,000)
0
50,000
100,000
150,000
200,000
250,000
2013Q4
2014Q1
2014Q2
2014Q3
2014Q4
2015Q1
2015Q2
2015Q3 O
ccup
ancy
Rat
e
Abso
rptio
n (S
F)
Net Absorption* Direct & Sublease Occupancy Rate
0%
2%
4%
6%
8%
10%
12%
14%
16%
$28.00
$29.00
$30.00
$31.00
$32.00
$33.00
$34.00
$35.00
$36.00
2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 2015 Q3
Vaca
ncy
Rate
Rent
al R
ate
Average Class A Full Service Rental Rate Direct & Sublease Vacancy Rate
3523 2015 AQUILA Austin Market Report
SOUTHWEST SUBMARKET OFFICE RENTAL RATE PROJECTIONS
SOUTHWEST SUBMARKET OFFICE VACANCY RATE PROJECTIONS
5.0
6.4
7.8
9.2
10.6
12.0
0%
5%
10%
15%
20%
25%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Mar
ket S
ize
(Mill
ions
of S
F)
Tota
l Vac
ancy
Rat
e (%
)
Market Size Historic Vacancy Rate AQUILA Model 1% Job Growth 3% Job Growth
3% Job Growth
1% Job Growth
Encino Trace II
$15
$20
$25
$30
$35
$40
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Full
Serv
ice
Rent
al R
ates
($)
Historic Rental Rate AQUILA Model 1% Job Growth 3% Job Growth
3% Job Growth
1% Job Growth
36
SOUTHWEST AUSTINLARGE OFFICE AVAILABILITY
Building Direct Available SF Sublease Available SF Total Available SF
1 CityView Center - 24,478 SF 24,478 SF
2 Rialto II 1,588 SF 36,421 SF 38,009 SF
3 Rollingwood Center I & II 7,878 SF 109,812 SF 117,690 SF
4 3700 San Clemente 51,934 SF - 51,934 SF
5 The Park on Barton Creek 1 - 42,527 SF 42,527 SF
6 The Summit 1-5 52,939 SF - 52,939 SF
7 The Terrace 6 22,771 SF - 22,771 SF
8 The Terrace 7 1,239 SF 19,000 SF 20,239 SF
West Lake Hills
Bee cave
Barton Creek
SOU
THW
EST PKWY
1
5
2
6
3
4
7
8
20,000 SF + of available space
3723 2015 AQUILA Austin Market Report
SOUTHWEST AUSTINOFFICE DEVELOPMENT
Building Total SF Percent Preleased Estimated Delivery Status
1 Encino Trace II 158,137 15% 4Q 2015 Under Construction
2 The Backyard - Buildings B, J, & H 171,450 0% Planned Planned
3 Lantana Ridge I 87,500 0% Planned Planned
4 Lantana Ridge II 87,500 0% Planned Planned
5 Regency Park 90,000 0% Planned Planned
6 Rollingwood Center III 107,000 0% Planned Planned
7 The Terrace 3 203,130 0% Planned Planned
8 The Terrace 4 285,663 0% Planned Planned
9 The Terrace 5 218,809 0% Planned Planned
Under Construction Planned
West Lake Hills
Bee cave
Barton Creek
SOU
THW
EST PKWY
2
1
7893
5
4
6
38
SOUTHWEST CLASS A AVAILABILITY SUMMARY
Southwest Submarket AUSTIN, TXQ3 2015 CLASS A AVAILABILITY SUMMARY
FSW
Dimensional Place 1 6304 Bee Caves Rd
7 Floors 220,000 SF
100% Leased$36.42 Gross
FSW
Capital Ridge 320 Capital of Tx Hwy
7 floors216,511 SF
100% Leased$40.56 Gross
7
6
5
4
3
2
1
FSW
Dimensional Place 26300 Bee Caves Rd
5 Floors 156,000 SF
100% Leased$36.42 Gross
NSW
Four Barton Skyway1301 S Mopac Expy
5 Floors222,580 SF
100% Leased$38.36 Gross
NSW
Three Barton Skyway1221 S Mopac Expy
4 Floors173,302 SF
100% Leased$39.20 Gross
NSW
Two Barton Skyway1601 S Mopac Expy
4 Floors195,639 SF
100% Leased$39.29 Gross
3,240 SF
NSW
One Barton Skyway1501 S Mopac Expy
4 Floors195,324 SF98% Leased
$38.90 Gross
5,988 SF 4,189 SF
NSW
Barton Oaks Plaza V901 S Mopac Expy
5 Floors119,549 SF95% Leased
$39.80 Gross
NSW
Barton Oaks Plaza IV901 S Mopac Expy
5 Floors112,000 SF
100% Leased$40.00 Gross
7,237 SF
NSW
Barton Oaks Plaza III901 S Mopac Expy
5 Floors121,467 SF94% Leased
$39.66 Gross
11,073 SF
NSW
Barton Oaks Plaza II901 S Mopac Expy
5 Floors116,368 SF90% Leased
$40.62 Gross
4,901 SF
2,840 SF
NSW
Barton Oaks Plaza I901 S Mopac Expy
5 Floors99,404 SF
92% Leased$41.68 Gross
FSW
Encino Trace I5707 Southwest Pkwy
4 floors161,606 SF
100% Leased$34.50 Gross
42,671 SF
42,369 SF
16,782 SF
33,214 SF
FSW
Encino Trace II5707 Southwest Pkwy
4 floors158,137 SF15% Leased
$34.50 Gross
19,402 SF
FSW
Las Cimas II807 Las Cimas Pkwy
4 Floors156,069 SF88% Leased
$39.83 Gross
1,135 SF
3,718 SF
FSW
Las Cimas III805 Las Cimas Pkwy
4 Floors157,418 SF99% Leased
$39.93 Gross
2,587 SF 1,590 SF
FSW
Las Cimas IV900 S Capital of Tx Hwy
5 Floors138,008 SF98% Leased
$40.97 Gross
3,700 SF
FSW
Las Cimas I804 Las Cimas Pkwy
3 Floors85,000 SF
96% Leased$38.68 Gross
NSW
Mira Vista2705 Bee Caves Rd
3 Floors121,147 SF
100% Leased$41.09 Gross
21,265 SF
21,262 SF
NSW
The Park on Barton Creek One
3711 S Mopac Expy5 floors
102,608 SF100% Leased$37.83 Gross
NSW
The Park on Barton Creek Two
3711 S Mopac Expy5 floors
102,587 SF100% Leased$37.83 Gross
9,980 SF
6,162 SF
FSW
5000 Plaza on the Lake5000 Plaza on the
Lake Dr.3 Floors
118,063 SF95% Leased
$41.07 Gross
8,936 SF
FSW
Plaza on the Lake I 5001 Plaza on the
Lake Dr.3 Floors
122,530 SF93% Leased
$40.34 Gross
FSW
Plaza on the Lake II4801 Plaza on the
Lake Dr.3 Floors
111,166 SF100% Leased$41.46 Gross
FSW
3600 San Clemente B3600 N Capital of
Tx Hwy3 Floors
90,267 SF100% Leased$40.55 Gross
51,534
FSW
3700 San Clemente3700 N Capital of
Tx Hwy5 Floors
249,870 SF79% Leased
$41.00 Gross
FSW
3900 San Clemente3900 N Capital of
Tx Hwy5 Floors
251,146 SF100% Leased$38.93 Gross
52,934 SF
FSW
The Summit at Lantana - Bldg 300
7171 Southwest Pkwy4 Floors
217,077 SF76% Leased
$36.84 Gross
FSW
The Summit at Lantana - Bldg 400
7171 Southwest Pkwy4 Floors
220,218 SF100% Leased$36.84 Gross
6,354 SF
NSW
The Terrace I2600 Via Fortuna
5 Floors115,460 SF94% Leased
$38.40 Gross
NSW
The Terrace II2700 Via Fortuna
5 Floors114,635 SF
100% Leased$38.53 Gross
5,725 SF
9,716 SF
2,974 SF
4,356 SF
NSW
The Terrace VI2901 Via Fortuna
6 Floors196,717 SF88% Leased
$43.12 Gross
1,239 SF
NSW
The Terrace VII2801 Via Fortuna
6 Floors196,215 SF99% Leased
$43.09 Gross
5
4
3
2
1
5
4
3
2
1
4
3
2
1
4
3
2
1
4
3
2
1
5
4
3
2
1
5
4
3
2
1
5
4
3
2
1
5
4
3
2
1
5
4
3
2
1
4
3
2
1
4
3
2
1
3
2
1
4
3
2
1
5
4
3
2
1
3
2
1
5
4
3
2
1
5
4
3
2
1
3
2
1
3
2
1
3
2
1
3
2
1
5
4
3
2
1
5
4
3
2
1
5
4
3
2
1
4
3
2
1
5
4
3
2
1
6
5
4
3
2
1
6
5
4
3
2
1
7,704 SF
7,878 SF
NSW
Rollingwood Center II2500 Bee Caves Rd
2 Floors69,150 SF
89% Leased$41.00 Gross
3
2
1
NSW
Rollingwood Center I2500 Bee Caves Rd
4 Floors145,437 SF
100% Leased$41.00 Gross
4
3
2
1
37,416 SF
37,416 SF
27,276 SF
SUBLEASE SPACE
AVAILABLESPACE
3923 2015 AQUILA Austin Market Report
Southwest Submarket AUSTIN, TXQ3 2015 CLASS A AVAILABILITY SUMMARY
FSW
Dimensional Place 1 6304 Bee Caves Rd
7 Floors 220,000 SF
100% Leased$36.42 Gross
FSW
Capital Ridge 320 Capital of Tx Hwy
7 floors216,511 SF
100% Leased$40.56 Gross
7
6
5
4
3
2
1
FSW
Dimensional Place 26300 Bee Caves Rd
5 Floors 156,000 SF
100% Leased$36.42 Gross
NSW
Four Barton Skyway1301 S Mopac Expy
5 Floors222,580 SF
100% Leased$38.36 Gross
NSW
Three Barton Skyway1221 S Mopac Expy
4 Floors173,302 SF
100% Leased$39.20 Gross
NSW
Two Barton Skyway1601 S Mopac Expy
4 Floors195,639 SF
100% Leased$39.29 Gross
3,240 SF
NSW
One Barton Skyway1501 S Mopac Expy
4 Floors195,324 SF98% Leased
$38.90 Gross
5,988 SF 4,189 SF
NSW
Barton Oaks Plaza V901 S Mopac Expy
5 Floors119,549 SF95% Leased
$39.80 Gross
NSW
Barton Oaks Plaza IV901 S Mopac Expy
5 Floors112,000 SF
100% Leased$40.00 Gross
7,237 SF
NSW
Barton Oaks Plaza III901 S Mopac Expy
5 Floors121,467 SF94% Leased
$39.66 Gross
11,073 SF
NSW
Barton Oaks Plaza II901 S Mopac Expy
5 Floors116,368 SF90% Leased
$40.62 Gross
4,901 SF
2,840 SF
NSW
Barton Oaks Plaza I901 S Mopac Expy
5 Floors99,404 SF
92% Leased$41.68 Gross
FSW
Encino Trace I5707 Southwest Pkwy
4 floors161,606 SF
100% Leased$34.50 Gross
42,671 SF
42,369 SF
16,782 SF
33,214 SF
FSW
Encino Trace II5707 Southwest Pkwy
4 floors158,137 SF15% Leased
$34.50 Gross
19,402 SF
FSW
Las Cimas II807 Las Cimas Pkwy
4 Floors156,069 SF88% Leased
$39.83 Gross
1,135 SF
3,718 SF
FSW
Las Cimas III805 Las Cimas Pkwy
4 Floors157,418 SF99% Leased
$39.93 Gross
2,587 SF 1,590 SF
FSW
Las Cimas IV900 S Capital of Tx Hwy
5 Floors138,008 SF98% Leased
$40.97 Gross
3,700 SF
FSW
Las Cimas I804 Las Cimas Pkwy
3 Floors85,000 SF
96% Leased$38.68 Gross
NSW
Mira Vista2705 Bee Caves Rd
3 Floors121,147 SF
100% Leased$41.09 Gross
21,265 SF
21,262 SF
NSW
The Park on Barton Creek One
3711 S Mopac Expy5 floors
102,608 SF100% Leased$37.83 Gross
NSW
The Park on Barton Creek Two
3711 S Mopac Expy5 floors
102,587 SF100% Leased$37.83 Gross
9,980 SF
6,162 SF
FSW
5000 Plaza on the Lake5000 Plaza on the
Lake Dr.3 Floors
118,063 SF95% Leased
$41.07 Gross
8,936 SF
FSW
Plaza on the Lake I 5001 Plaza on the
Lake Dr.3 Floors
122,530 SF93% Leased
$40.34 Gross
FSW
Plaza on the Lake II4801 Plaza on the
Lake Dr.3 Floors
111,166 SF100% Leased$41.46 Gross
FSW
3600 San Clemente B3600 N Capital of
Tx Hwy3 Floors
90,267 SF100% Leased$40.55 Gross
51,534
FSW
3700 San Clemente3700 N Capital of
Tx Hwy5 Floors
249,870 SF79% Leased
$41.00 Gross
FSW
3900 San Clemente3900 N Capital of
Tx Hwy5 Floors
251,146 SF100% Leased$38.93 Gross
52,934 SF
FSW
The Summit at Lantana - Bldg 300
7171 Southwest Pkwy4 Floors
217,077 SF76% Leased
$36.84 Gross
FSW
The Summit at Lantana - Bldg 400
7171 Southwest Pkwy4 Floors
220,218 SF100% Leased$36.84 Gross
6,354 SF
NSW
The Terrace I2600 Via Fortuna
5 Floors115,460 SF94% Leased
$38.40 Gross
NSW
The Terrace II2700 Via Fortuna
5 Floors114,635 SF
100% Leased$38.53 Gross
5,725 SF
9,716 SF
2,974 SF
4,356 SF
NSW
The Terrace VI2901 Via Fortuna
6 Floors196,717 SF88% Leased
$43.12 Gross
1,239 SF
NSW
The Terrace VII2801 Via Fortuna
6 Floors196,215 SF99% Leased
$43.09 Gross
5
4
3
2
1
5
4
3
2
1
4
3
2
1
4
3
2
1
4
3
2
1
5
4
3
2
1
5
4
3
2
1
5
4
3
2
1
5
4
3
2
1
5
4
3
2
1
4
3
2
1
4
3
2
1
3
2
1
4
3
2
1
5
4
3
2
1
3
2
1
5
4
3
2
1
5
4
3
2
1
3
2
1
3
2
1
3
2
1
3
2
1
5
4
3
2
1
5
4
3
2
1
5
4
3
2
1
4
3
2
1
5
4
3
2
1
6
5
4
3
2
1
6
5
4
3
2
1
7,704 SF
7,878 SF
NSW
Rollingwood Center II2500 Bee Caves Rd
2 Floors69,150 SF
89% Leased$41.00 Gross
3
2
1
NSW
Rollingwood Center I2500 Bee Caves Rd
4 Floors145,437 SF
100% Leased$41.00 Gross
4
3
2
1
37,416 SF
37,416 SF
27,276 SF
SUBLEASE SPACE
AVAILABLESPACE
40
4123 2015 AQUILA Austin Market Report
THE APPENDIX
Long Term Performance of Submarkets 42
Long Term Performance: CBD vs. Suburban 43
Central Business District
Competitive Set Performance 44
Competitive Set Buildings 45
Northwest Submarket
Competitive Set Performance 46
Micromarket Performance 47
Competitive set Buildings by micromarket 50
Southwest Submarket
Competitive Set Performance 53
Micromarket Performance 54
Competitive set Buildings by micromarket 56
42
CITYWIDE AVAILABLE SF VS. VACANCY RATE CBD AVAILABLE SF VS. VACANCY RATE
NORTHWEST AVAILABLE SF VS. VACANCY RATE SOUTHWEST AVAILABLE SF VS. VACANCY RATE
LONG TERM PERFORMANCEOF SUBMARKETS
CITYWIDE AVERAGE CLASS A ASKING RATES ABSORPTION & OCCUPANCY RATE*Absorption includes sublease space.
Numbers based on CBRE statistics.
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
$45.00
$50.00
Full
Serv
ice
Rent
al R
ate
CBD Northwest Southwest Citywide
0%
5%
10%
15%
20%
25%
30%
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
Dir
ect &
Sub
leas
e Va
canc
y Ra
te
Avai
labi
lity
(SF)
Citywide Direct Availability Citywide Sublease Availability Citywide Vacancy Rate
65%
70%
75%
80%
85%
90%
95%
-2,000,000
-1,000,000
0
1,000,000
2,000,000
3,000,000
4,000,000
Dir
ect &
Sub
leas
e O
ccup
ancy
Rat
e
Year
Ove
r Ye
ar D
irec
t & S
uble
ase
Abso
rptio
n (S
F)
CBD Northwest Southwest Citywide Occupancy Rate
0%
6%
12%
18%
24%
30%
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
Dir
ect &
Sub
leas
e Va
canc
y Ra
te
Avai
labi
lity
(SF)
CBD Direct Availability CBD Sublease Availability CBD Vacancy Rate Citywide Vacancy Rate
0%
6%
12%
18%
24%
30%
36%
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
4,500,000
5,000,000
Dir
ect &
Sub
leas
e Va
canc
y Ra
te
Avai
labi
lity
(SF)
Northwest Direct Availability Northwest Sublease Availability
Northwest Vacancy Rate Citywide Vacancy Rate
0%
6%
12%
18%
24%
30%
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
Dir
ect &
Sub
leas
e Va
canc
y Ra
te
Avai
labi
lity
(SF)
Southwest Direct Availability Southwest Sublease Availability
Southwest Vacancy Rate Citywide Vacancy Rate
4323 2015 AQUILA Austin Market Report
AVERAGE CLASS A ASKING RATES DIRECT & SUBLEASE VACANCY RATES
DIRECT & SUBLEASE AVAILABILITY SF UNDER CONSTRUCTION
LONG TERM PERFORMANCECBD VS. SUBURBANNumbers based on CBRE statistics.
0%
5%
10%
15%
20%
25%
30%
Title
CBD Vacancy Rate Suburban Vacancy Rate Citywide Vacancy Rate
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
Area
Und
er C
onst
ruct
ion
(SF)
CBD Northwest Southwest
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
$45.00
$50.00
Full
Serv
ice
Rent
al R
ate
CBD Suburban Citywide
0%
5%
10%
15%
20%
25%
30%
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
Dir
ect &
Sub
leas
e Va
canc
y Ra
te
Dir
ect &
Sub
leas
e Av
aila
bilit
y (S
F)
CBD Suburban Citywide Vacancy Rate
44
CENTRAL BUSINESS DISTRICTCOMPETITIVE SET PERFORMANCE
AVAILABLE SF VS. VACANCY RATE NET ABSORPTION
VACANCY VS. RENTAL RATES
CBD COMPETITIVE SET
Quarter Net Rentable Area
Direct Available SF
Sublease Available SF
Net Absorption*
Direct & Sublease Vacancy Rate
Avg. Class A Full Service Rental Rate
2013 Q4 5,636,079 690,237 17,977 (2,302) 12.57% $43.51
2014 Q1 5,637,136 618,961 4,210 86,100 11.05% $44.03
2014 Q2 5,637,136 576,465 25,189 21,517 10.67% $44.81
2014 Q3 5,827,916 483,868 81,356 227,210 9.70% $45.13
2014 Q4 5,827,916 503,540 69,160 (7,476) 9.83% $46.49
2015 Q1 6,344,401 421,858 55,200 612,127 7.52% $47.28
2015 Q2 6,466,952 479,092 40,409 80,108 8.03% $47.74
2015 Q3 6,466,952 370,193 38,822 110,486 6.32% $48.70
0%
2%
4%
6%
8%
10%
12%
14%
16%
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 2015 Q3
Vaca
ncy
Rate
Avai
labi
lity
(SF)
Direct Available SF Sublease Available SF Direct & Sublease Vacancy Rate
86%
87%
88%
89%
90%
91%
92%
93%
94%
(100,000)
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 2015 Q3
Occ
upan
cy R
ate
Abso
rptio
n (S
F)
Net Absorption* Direct & Sublease Occupancy Rate
5%
7%
9%
11%
13%
15%
$43.00
$44.00
$45.00
$46.00
$47.00
$48.00
$49.00
2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 2015 Q3
Vaca
ncy
Rate
Rent
al R
ate
Average Class A Full Service Rental Rate Direct & Sublease Vacancy Rate
4523 2015 AQUILA Austin Market Report
Building Name Net Rentable Area
Direct Available SF
Sublease Available SF
Asking Rental Rate
Estimated OpEx
100 Congress 411,536 28,001 ↑ 0 ↓ $37.00 ↑ $18.65 ↑
300 West 6th 454,225 1,421 ↓ 7,081 ↑ $36.00 ↑ $18.42
301 Congress 418,338 48,345 ↓ 0 $33.50 ↑ $17.95
400 West 15th 281,196 8,627 ↓ 17,218 $24.50 $15.92 ↑
501 Congress 122,551 18,922 ↓ 0 $32.00 $15.23
515 Congress 258,176 9,522 ↓ 1,455 ↓ $32.00 $15.95
600 Congress Ave. 503,951 29,676 ↓ 0 $33.00 $15.80
816 Congress 434,081 16,096 ↓ 0 $29.00 ↑ $16.59
Austin Centre 326,335 17,794 ↑ 6,576 ↑ $28.00 ↑ $15.88
Capitol Center 164,044 10,540 ↑ 5,559 $28.00 ↑ $17.08
Capitol Tower 172,837 0 0 $29.00 ↑ $14.67
Chase Tower 389,503 16,711 ↑ 0 $31.00 $17.90
Colorado Tower 373,334 0 ↓ 0 $34.00 $14.49
Frost Bank Tower 535,078 8,881 ↓ 0 $38.00 ↑ $19.25
IBC Bank Plaza 194,749 0 ↓ 0 $30.00 $13.60
Lavaca Plaza 118,635 0 ↓ 0 $29.50 $17.54
Littlefield Building 109,779 30,424 933 ↓ $29.00 $14.32
One Congress Plaza 518,385 72,848 0 ↓ $30.00 $16.69
San Jacinto Center 406,279 40,207 ↓ 0 $33.00 ↑ $17.15
Scarbrough Building 130,789 12,178 ↑ 0 ↓ $31.00 ↑ $12.75
Seaholm 143,151 0 0 $28.00 $12.00
CBD COMPETITIVE SET BUILDINGS
46
NORTHWEST SUBMARKETCOMPETITIVE SET PERFORMANCE
AVAILABLE SF VS. VACANCY RATE NET ABSORPTION
VACANCY VS. RENTAL RATES
Quarter Net Rentable Area
Direct Available SF
Sublease Available SF
Net Absorption*
Direct & Sublease Vacancy Rate
Avg. Class A Full Service Rental Rate
2013 Q4 12,293,184 1,114,662 127,432 30,812 10.10% $30.54
2014 Q1 12,293,184 1,050,027 135,810 56,257 9.65% $31.21
2014 Q2 12,242,690 1,030,332 246,257 (141,246) 10.43% $31.61
2014 Q3 12,389,252 911,833 321,739 189,579 9.96% $32.12
2014 Q4 12,845,611 1,197,426 320,587 171,918 11.82% $32.93
2015 Q1 12,931,909 992,203 292,334 319,774 9.93% $33.39
2015 Q2 13,120,924 897,208 284,035 292,309 9.00% $33.83
2015 Q3 13,310,232 1,129,335 287,248 (46,032) 10.64% $33.55
NORTHWEST COMPETITIVE SET
*Absorption includes sublease space.
0%
2%
4%
6%
8%
10%
12%
14%
16%
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 2015 Q3
Vaca
ncy
Rate
Avai
labi
lity
(SF)
Direct Available SF Sublease Available SF Direct & Sublease Vacancy Rate
87%
88%
89%
90%
91%
92%
93%
(200,000)
(100,000)
0
100,000
200,000
300,000
400,000
2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 2015 Q3O
ccup
ancy
Rat
e
Abso
rptio
n (S
F)
Net Absorption* Direct & Sublease Occupancy Rate
0%
2%
4%
6%
8%
10%
12%
14%
$28.00
$29.00
$30.00
$31.00
$32.00
$33.00
$34.00
$35.00
2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 2015 Q3
Vaca
ncy
Rate
Rent
al R
ate
Average Class A Full Service Rental Rate Direct & Sublease Vacancy Rate
4723 2015 AQUILA Austin Market Report
ARBORETUM/DOMAINMICROMARKET PERFORMANCE
Quarter Net Rentable Area
Direct Available SF
Sublease Available SF
Net Absorption*
Direct & Sublease Vacancy Rate
Avg. Class A Full Service Rental Rate
2013 Q4 6,106,452 433,941 35,988 166 7.70% $32.00
2014 Q1 6,106,452 433,079 55,206 (18,356) 8.00% $32.55
2014 Q2 6,106,452 476,360 109,332 (97,407) 9.59% $33.04
2014 Q3 6,253,014 401,651 157,535 173,068 8.94% $33.66
2014 Q4 6,474,987 445,544 121,157 214,458 8.75% $34.38
2015 Q1 6,553,774 447,850 71,595 126,043 7.93% $34.46
2015 Q2 6,742,789 389,248 63,891 255,321 6.72% $34.77
2015 Q3 6,719,697 407,169 76,078 (53,200) 7.19% $34.38
ARBORETUM/DOMAIN COMPETITIVE SET
AVAILABLE SF VS. VACANCY RATE NET ABSORPTION
VACANCY VS. RENTAL RATES
*Absorption includes sublease space.
0%
2%
4%
6%
8%
10%
12%
14%
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 2015 Q3
Vaca
ncy
Rate
Avai
labi
lity
(SF)
Direct Available SF Sublease Available SF Direct & Sublease Vacancy Rate
0%
2%
4%
6%
8%
10%
12%
14%
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 2015 Q3
Vaca
ncy
Rate
Avai
labi
lity
(SF)
Direct Available SF Sublease Available SF Direct & Sublease Vacancy Rate
6.0%
6.5%
7.0%
7.5%
8.0%
8.5%
9.0%
9.5%
10.0%
$31.00
$31.50
$32.00
$32.50
$33.00
$33.50
$34.00
$34.50
$35.00
2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 2015 Q3
Vaca
ncy
Rate
Rent
al R
ate
Average Class A Full Service Rental Rate Direct & Sublease Vacancy Rate
48
SHEPHERD MOUNTAIN/2222MICROMARKET PERFORMANCE
AVAILABLE SF VS. VACANCY RATE NET ABSORPTION
VACANCY VS. RENTAL RATES
SHEPHERD MOUNTAIN/2222 COMPETITIVE SET
Quarter Net Rentable Area
Direct Available SF
Sublease Available SF
Net Absorption*
Direct & Sublease Vacancy Rate
Avg. Class A Full Service Rental Rate
2013 Q4 2,453,857 274,295 40,399 (2,379) 12.82% $30.16
2014 Q1 2,453,857 276,447 29,559 8,688 12.47% $31.43
2014 Q2 2,453,857 241,923 46,956 17,127 11.77% $31.95
2014 Q3 2,453,857 211,437 92,007 (14,565) 12.37% $32.28
2014 Q4 2,688,442 389,788 127,233 21,008 19.23% $33.10
2015 Q1 2,690,750 207,238 179,538 132,553 14.37% $34.17
2015 Q2 2,690,750 181,807 152,245 52,724 12.41% $34.45
2015 Q3 2,690,750 193,874 135,899 4,279 12.26% $34.55*Absorption includes sublease space.
0%
4%
8%
12%
16%
20%
24%
0
100,000
200,000
300,000
400,000
500,000
600,000
2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 2015 Q3
Vaca
ncy
Rate
Avai
labi
lity
(SF)
Direct Available SF Sublease Available SF Direct & Sublease Vacancy Rate
75%
77%
79%
81%
83%
85%
87%
89%
91%
93%
(40,000)
(20,000)
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 2015 Q3
Occ
upan
cy R
ate
Abso
rptio
n (S
F)
Net Absorption* Direct & Sublease Occupancy Rate
0%
3%
6%
9%
12%
15%
18%
21%
24%
$27.00
$28.00
$29.00
$30.00
$31.00
$32.00
$33.00
$34.00
$35.00
2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 2015 Q3
Vaca
ncy
Rate
Rent
al R
ate
Average Class A Full Service Rental Rate Direct & Sublease Vacancy Rate
4923 2015 AQUILA Austin Market Report
FAR NORTHWESTMICROMARKET PERFORMANCEFAR NORTHWEST COMPETITIVE SET
AVAILABLE SF VS. VACANCY RATE NET ABSORPTION
VACANCY VS. RENTAL RATES
Quarter Net Rentable Area
Direct Available SF
Sublease Available SF
Net Absorption*
Direct & Sublease Vacancy Rate
Avg. Class A Full Service Rental Rate
2013 Q4 3,732,875 406,426 51,045 33,025 12.26% $28.41
2014 Q1 3,732,875 340,501 51,045 65,925 10.49% $28.88
2014 Q2 3,682,381 312,049 89,969 (60,966) 10.92% $29.02
2014 Q3 3,682,381 298,745 72,197 31,076 10.07% $29.40
2014 Q4 3,682,182 362,094 72,197 (63,548) 11.79% $30.26
2015 Q1 3,687,385 337,115 41,201 61,178 10.26% $30.93
2015 Q2 3,687,385 326,153 67,899 (15,736) 10.69% $31.66
2015 Q3 3,899,785 528,292 75,271 2,889 15.48% $31.42*Absorption includes sublease space.
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 2015 Q3
Vaca
ncy
Rate
Avai
labi
lity
(SF)
Direct Available SF Sublease Available SF Direct & Sublease Vacancy Rate
80%
82%
84%
86%
88%
90%
92%
94%
96%
(80,000)
(60,000)
(40,000)
(20,000)
0
20,000
40,000
60,000
80,000
2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 2015 Q3
Occ
upan
cy R
ate
Abso
rptio
n (S
F)
Net Absorption* Direct & Sublease Occupancy Rate
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
$26.00
$27.00
$28.00
$29.00
$30.00
$31.00
$32.00
2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 2015 Q3
Vaca
ncy
Rate
Rent
al R
ate
Average Class A Full Service Rental Rate Direct & Sublease Vacancy Rate
50
ARBORETUM/DOMAIN MICROMARKET COMPETITIVE SET BUILDINGS
Building Name Net Rentable Area
Direct Available SF
Sublease Available SF
Asking Rental Rate
Estimated OpEx
3307 Northland 98,888 5,653 ↓ 0 $16.50 $10.24
9500 Arboretum 182,331 0 18,319 $22.00 $13.00
Arboretum Atrium 90,280 2,515 0 $21.00 $14.27
Arboretum Plaza One 146,347 0 0 $27.00 ↑ $14.23
Arboretum Plaza Two 98,828 0 0 $27.00 ↑ $14.23
Arboretum Point 150,033 0 0 $23.00 $13.44
Atrium Office Centre 119,709 40,364 ↓ 0 $17.50 $7.89 ↓
Austin Oaks 445,240 13,254 ↓ 3,981 ↑ $18.00 $10.90
Balcones Centre 74,876 3,919 0 $24.00 $9.86
Braker Pointe I 77,454 15,370 ↓ 0 $21.00 $13.16
Braker Pointe II 103,114 1,953 ↑ 8,721 ↓ $21.00 $12.89
Braker Pointe III 195,230 0 0 $25.00 ↑ $12.84
The Campus at Arboretum 1 60,059 11,590 0 $22.00 $13.78
The Campus at Arboretum 2 33,135 5,891 ↑ 0 $22.00 $13.85
The Campus at Arboretum 3 32,765 0 0 $22.00 $14.53
The Campus at Arboretum 4 85,916 6,447 0 $22.00 $14.17
The Campus at Arboretum 5 105,000 5,585 0 $22.00 $14.12
Colina West 69,299 0 0 $19.75 $10.71
Domain 2 143,331 0 0 $29.00 ↓ $11.00
Domain 3 179,006 0 20,816 $25.50 $10.34
Domain 4 152,012 0 0 $24.00 $11.16
Domain 7 221,973 31,000 ↓ 0 $28.00 ↑ $11.33
Domain Gateway 173,962 0 0 $21.00 $14.95
Great Hills Corporate Center I 59,228 2,935 ↑ 0 $17.50 ↓ $10.95
Great Hills Corporate Center II 60,429 0 0 $17.50 ↓ $10.95
Great Hills Corporate Center III 56,422 13,899 ↓ 0 $17.50 ↓ $10.95
Great Hills Plaza 139,252 18,743 ↑ 0 $20.00 $11.23
Greystone Plaza 78,248 8,427 ↓ 0 $17.00 ↓ $12.63
Heritage Plaza 74,736 11,798 ↑ 0 $28.00 $11.29
Kaleido I & II 73,149 8,680 ↑ 0 $16.00 ↓ $10.20 ↑
Lakeview Plaza 120,956 6,266 0 $20.00 $10.73
Northpoint Centre I & II 151,126 13,890 ↑ 0 $22.00 $11.22
Offices at the Domain Bldg 1 92,955 7,428 ↑ 0 $26.50 $14.75
Offices at the Domain Bldg 2 75,509 0 0 $26.50 $13.59
One Far West Plaza 70,642 8,173 ↑ 0 $17.00 ↓ $12.03 ↓
Park North I & II 133,568 4,924 ↓ 0 $18.00 $11.83 ↑
Plaza 7000 155,076 24,405 ↑ 0 $23.50 $12.92 ↑
Prominent Pointe I 150,376 24,342 ↓ 0 $24.50 $13.65
Prominent Pointe II 102,567 0 13,112 ↑ $24.50 $14.70
Quarry Lake Business Center 117,512 5,048 0 $20.00 $11.08
Quarry Oaks I 165,435 7,155 0 $24.00 $11.82
Quarry Oaks II 126,000 0 0 $25.00 $11.48
Reunion Park 118,142 14,631 0 $19.50 $11.16
Stone Creek I 76,860 0 0 $22.00 $0.00
Stone Creek II 162,723 6,687 0 $22.00 $12.60
Stone Creek Park 77,185 0 0 $20.00 $13.45
Stonebridge Plaza I 193,200 3,794 ↑ 0 $26.00 $14.40
5123 2015 AQUILA Austin Market Report
Building Name Net Rentable Area
Direct Available SF
Sublease Available SF
Asking Rental Rate
Estimated OpEx
Stonebridge Plaza II 192,864 0 0 $26.00 $13.98
Stratum Executive Center Bldg A 61,000 8,428 ↑ 5,429 $20.00 $12.00
Stratum Executive Center Bldg B 61,000 0 ↓ 5,700 ↑ $20.00 $12.00
Stratum Executive Center Bldg C 61,000 12,344 0 $20.00 $12.00
Stratum Executive Center Bldg D 61,000 0 0 $20.00 $12.00
The Park at 8300 N. MoPac 93,317 6,911 0 $23.00 ↑ $13.40
UFCU Plaza 246,869 25,161 0 $20.00 $12.15
Westech 360 Bldgs 1-4 175,529 15,709 ↓ 0 $20.00 $11.93
Westpark Office 1-4 97,034 3,850 ↓ 0 $28.50 ↑ $9.66
Building Name Net Rentable Area
Direct Available SF
Sublease Available SF
Asking Rental Rate
Estimated OpEx
Bridgepoint Square 1 84,692 6,636 ↓ 0 $23.00 $12.43
Bridgepoint Square 2 92,459 12,412 ↓ 0 $23.00 $12.43
Bridgepoint Square 3 78,352 0 0 $23.00 $12.43
Bridgepoint Square 4 109,175 0 0 $23.00 $12.43
Bridgepoint Square 5 76,793 0 ↓ 0 $23.00 $12.43
Bridgepointe Plaza I 105,333 0 0 $23.50 ↑ $12.81
Bridgepointe Plaza II 72,640 5,016 ↓ 0 $23.50 ↑ $12.81
Champion Office Park I & II 230,000 0 0 $26.50 $11.00
Four Points Centre I & II 192,396 0 0 $23.50 $12.62
Ladera Bend 1 56,466 0 0 $21.50 $16.34
Ladera Bend 2 45,732 2,900 0 $21.50 $13.88
Ladera Bend 3 56,196 0 56,196 $21.50 $13.83
Lakewood Center I 47,389 0 ↓ 45,020 $22.00 ↑ $13.20
Lakewood Center II 44,611 0 13,206 $22.00 ↑ $13.20
Lakewood in the Park B 102,086 11,998 0 $19.50 $9.60
Lakewood in the Park C 78,596 12,808 ↑ 0 $19.50 $11.80
Millennium Building 125,612 0 0 $22.00 $11.94
Park Centre Bldg 1 89,822 10,079 ↓ 0 $18.00 $11.75
Park Centre Bldg 2 35,095 18,730 ↑ 0 $18.00 $11.75
Park Centre Bldg 3 78,270 57,562 ↑ 0 $18.00 $11.75
Reserve at Bull Creek A 43,782 7,622 0 $18.00 $12.28
Reserve at Bull Creek B 43,713 0 0 $20.00 $10.86
Reserve at Bull Creek C 43,695 0 0 $20.00 $11.44
River Place Corporate Park I 76,529 0 0 $21.00 $12.79
River Place Corporate Park II 114,491 9,987 0 $21.00 $12.43
River Place Corporate Park III 113,465 4,339 0 $21.00 $12.50
River Place Corporate Park IV 87,639 8,601 ↑ 0 $21.00 $13.53
River Place Corporate Park V 67,601 13,246 ↑ 0 $21.00 $12.01
River Place Corporate Park VI 62,037 0 0 $21.00 $13.33
River Place Corporate Park VII 69,119 0 21,477 ↓ $21.00 $14.15
Shepherd Mountain Plaza 100,937 0 0 ↓ $33.00 $11.28
Stone Cliff 66,027 11,938 ↑ 0 $18.00 $12.73
SHEPHERD MOUNTAIN/2222 MICROMARKET COMPETITIVE SET BUILDINGS
52
Building Name Net Rentable Area
Direct Available SF
Sublease Available SF
Asking Rental Rate
Estimated OpEx
Amber Oaks A 78,164 0 10,872 ↑ $19.00 $10.94
Amber Oaks B 44,184 0 0 $19.00 $8.30
Amber Oaks C 44,184 0 0 $19.00 $8.60
Amber Oaks D 28,733 0 0 $19.00 $10.45
Amber Oaks E 63,111 0 0 $19.00 $8.03
Amber Oaks F 78,034 78,034 0 $19.00 $10.09
Amber Oaks G 106,455 9,923 14,730 $19.00 $10.01
Amber Oaks H 101,045 0 0 $19.00 $10.93
Amber Oaks I 50,313 10,828 0 $19.00 $11.63
Amber Oaks J 50,111 6,245 33,147 $19.00 $10.90
Aspen Lake One 204,940 0 0 $18.50 $13.26
Crossings at Lakeline I 114,726 4,078 0 $21.50 ↑ $10.98
Crossings at Lakeline II 117,548 6,879 ↓ 0 $21.50 ↑ $11.10
Paloma Ridge A 106,200 106,200 0 $18.00 $9.50
Paloma Ridge B 106,200 106,200 0 $18.00 $9.50
Parmer Business Park A, B, C 123,731 0 0 $18.50 $5.60
Parmer Business Park D, E, F 107,283 0 0 $18.50 $5.60
Pecan Park I 136,444 0 ↓ 0 $21.50 $10.72 ↑
Pecan Park II 136,245 0 0 $19.50 $9.45
Research Park Place 7 125,701 3,790 0 ↓ $22.00 $11.55
Research Park Place 8 125,700 33,518 0 $22.00 $11.55
Research Park Plaza I 136,068 11,747 ↓ 0 $21.50 ↓ $13.96
Research Park Plaza II 135,813 0 0 $21.50 ↓ $13.96
Research Park Plaza III 173,530 0 0 $23.00 $13.08
Research Park Plaza IV 184,114 11,342 ↑ 0 $23.00 $13.08
Riata Corporate Park Bldg 2 63,372 16,821 0 $22.00 $12.33
Riata Corporate Park Bldg 3 63,849 0 ↓ 0 $22.00 $12.33
Riata Corporate Park Bldg 4 93,737 93,737 0 $22.00 $12.33
Riata Corporate Park Bldg 5 93,828 23,783 ↑ 0 $22.00 $12.33
Riata Corporate Park Bldg 6 93,835 0 0 $22.00 $12.33
Riata Corporate Park Bldg 7 92,719 0 0 $22.00 $12.33
Riata Corporate Park Bldg 8 93,718 0 16,522 $22.00 $12.33
Riata Corporate Park Bldg 9 92,973 0 0 $22.00 $12.33
Riata Crossing Bldg 1 81,775 0 0 $19.00 $8.00
Riata Crossing Bldg 2 114,906 0 0 $19.00 $8.00
Riata Crossing Bldg 3 81,229 0 0 $19.00 $8.00
Riata Crossing Bldg 4 79,465 0 0 $19.00 $8.00
Tower of the Hills/Tower Point 175,802 5,167 ↓ 0 $20.00 ↑ $12.60
FAR NORTHWEST MICROMARKET COMPETITIVE SET BUILDINGS
5323 2015 AQUILA Austin Market Report
SOUTHWESTCOMPETITIVE SET PERFORMANCESOUTHWEST COMPETITIVE SET
AVAILABLE SF VS. VACANCY RATE NET ABSORPTION
VACANCY VS. RENTAL RATES
Quarter Net Rentable Area
Direct Available SF
Sublease Available SF
Net Absorption*
Direct & Sublease Vacancy Rate
Avg. Class A Full Service Rental Rate
2013 Q4 7,108,930 552,899 97,634 51,204 9.15% $33.82
2014 Q1 7,102,874 480,177 202,095 (37,795) 9.61% $34.71
2014 Q2 7,102,874 387,913 208,978 85,381 8.40% $35.06
2014 Q3 7,102,874 294,587 169,604 132,700 6.54% $35.47
2014 Q4 7,102,547 386,333 182,477 (104,946) 8.01% $36.07
2015 Q1 7,100,750 399,919 188,613 (21,519) 8.29% $36.98
2015 Q2 7,782,464 428,605 213,812 627,829 8.25% $37.55
2015 Q3 7,949,325 353,625 264,345 191,308 7.77% $37.61*Absorption includes sublease space.
0%
2%
4%
6%
8%
10%
12%
14%
16%
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 2015 Q3
Vaca
ncy
Rate
Avai
labi
lity
(SF)
Direct Available SF Sublease Available SF Direct & Sublease Vacancy Rate
87%
88%
89%
90%
91%
92%
93%
94%
95%
96%
(200,000)
(100,000)
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 2015 Q3O
ccup
ancy
Rat
e
Abso
rptio
n (S
F)
Net Absorption* Direct & Sublease Occupancy Rate
5%
6%
7%
8%
9%
10%
$33.00
$34.00
$35.00
$36.00
$37.00
$38.00
2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 2015 Q3
Vaca
ncy
Rate
Rent
al R
ate
Average Class A Full Service Rental Rate Direct & Sublease Vacancy Rate
54
NEAR SOUTHWESTMICROMARKET PERFORMANCE
AVAILABLE SF VS. VACANCY RATE NET ABSORPTION
VACANCY VS. RENTAL RATES
NEAR SOUTHWEST COMPETITIVE SET
Quarter Net Rentable Area
Direct Available SF
Sublease Available SF
Net Absorption*
Direct & Sublease Vacancy Rate
Avg. Class A Full Service Rental Rate
2013 Q4 2,718,656 228,673 41,301 13,994 9.93% $35.99
2014 Q1 2,712,851 209,356 143,888 (89,075) 13.02% $37.18
2014 Q2 2,712,851 191,624 165,931 (4,311) 13.18% $37.40
2014 Q3 2,712,851 174,207 126,557 56,791 11.09% $37.59
2014 Q4 2,713,137 158,703 124,248 18,099 10.43% $38.03
2015 Q1 2,711,340 143,863 125,110 12,181 9.92% $39.26
2015 Q2 2,925,937 110,815 101,710 271,045 7.26% $39.49
2015 Q3 2,925,937 105,532 175,528 (68,535) 9.61% $39.84*Absorption includes sublease space.
0%
2%
4%
6%
8%
10%
12%
14%
16%
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 2015 Q3
Vaca
ncy
Rate
Avai
labi
lity
(SF)
Direct Available SF Sublease Available SF Direct & Sublease Vacancy Rate
85%
86%
87%
88%
89%
90%
91%
92%
93%
94%
(150,000)
(100,000)
(50,000)
0
50,000
100,000
150,000
200,000
250,000
300,000
2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 2015 Q3O
ccup
ancy
Rat
e
Abso
rptio
n (S
F)
Net Absorption* Direct & Sublease Occupancy Rate
5%
7%
9%
11%
13%
15%
17%
$34.00
$35.00
$36.00
$37.00
$38.00
$39.00
$40.00
$41.00
2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 2015 Q3
Vaca
ncy
Rate
Rent
al R
ate
Average Class A Full Service Rental Rate Direct & Sublease Vacancy Rate
5523 2015 AQUILA Austin Market Report
FAR SOUTHWESTMICROMARKET PERFORMANCEFAR SOUTHWEST COMPETITIVE SET
AVAILABLE SF VS. VACANCY RATE NET ABSORPTION
VACANCY VS. RENTAL RATES
Quarter Net Rentable Area
Direct Available SF
Sublease Available SF
Net Absorption*
Direct & Sublease Vacancy Rate
Avg. Class A Full Service Rental Rate
2013 Q4 4,390,274 324,226 56,333 37,210 8.67% $32.48
2014 Q1 4,390,023 270,821 58,207 51,280 7.49% $33.19
2014 Q2 4,390,023 196,289 43,047 89,692 5.45% $33.62
2014 Q3 4,390,023 120,380 43,047 75,909 3.72% $34.16
2014 Q4 4,389,410 227,630 58,229 (123,045) 6.51% $34.86
2015 Q1 4,389,410 256,056 63,503 (33,700) 7.28% $35.57
2015 Q2 4,856,527 317,790 112,102 356,784 8.85% $36.39
2015 Q3 5,023,388 248,093 88,817 259,843 6.71% $36.31*Absorption includes sublease space.
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 2015 Q3
Vaca
ncy
Rate
Avai
labi
lity
(SF)
Direct Available SF Sublease Available SF Direct & Sublease Vacancy Rate
88%
90%
92%
94%
96%
98%
100%
(200,000)
(100,000)
0
100,000
200,000
300,000
400,000
2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 2015 Q3
Occ
upan
cy R
ate
Abso
rptio
n (S
F)
Net Absorption* Direct & Sublease Occupancy Rate
0%
3%
6%
9%
12%
15%
$32.00
$33.00
$34.00
$35.00
$36.00
$37.00
2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 2015 Q3
Vaca
ncy
Rate
Rent
al R
ate
Average Class A Full Service Rental Rate Direct & Sublease Vacancy Rate
56
NEAR SOUTHWEST MICROMARKET COMPETITIVE SET BUILDINGS
Building Name Net Rentable Area
Direct Available SF
Sublease Available SF
Asking Rental Rate
Estimated OpEx
Barton Creek Plaza I 72,974 17,132 ↓ 0 $22.00 $12.53
Barton Creek Plaza II 64,718 8,466 ↑ 0 $23.00 ↑ $11.69
Barton Creek Plaza III 64,842 6,413 0 $23.00 ↑ $11.83
Barton Oaks Plaza I 99,404 7,741 ↑ 0 $27.00 ↑ $14.68
Barton Oaks Plaza II 116,368 11,073 0 $26.25 ↑ $14.37
Barton Oaks Plaza III 121,467 7,237 ↑ 0 ↓ $26.25 ↑ $13.41
Barton Oaks Plaza IV 112,000 0 0 $40.00 $13.86
Barton Oaks Plaza V 119,549 5,988 ↑ 4,189 $26.00 $13.80
Barton Skyway I 195,324 3,240 ↓ 0 ↓ $25.50 $13.40
Barton Skyway II 195,639 0 ↓ 0 $25.50 $13.79
Barton Skyway III 173,302 0 ↓ 0 $25.50 $13.70
Barton Skyway IV 222,580 0 0 $25.50 $12.86
Centre I 39,903 0 ↓ 0 $21.00 ↑ $12.50 ↑
Centre II 54,610 0 ↓ 0 $19.50 $11.82
Mira Vista 121,147 0 0 $27.00 $14.09
Overlook at Gaines Ranch 50,725 0 0 $26.50 $14.17
Rollingwood Center I & II 214,587 7,878 109,812 ↑ $29.00 ↑ $12.00
Spyglass Point 58,576 0 0 $21.00 $13.45
The Park on Barton Creek 1 102,608 0 42,527 ↓ $24.50 $13.33
The Park on Barton Creek 2 102,587 0 0 $24.50 $13.33
The Terrace 1 115,460 6,354 0 $23.50 $14.90
The Terrace 2 114,635 0 ↓ 0 $23.50 $15.03
The Terrace 6 196,717 22,771 ↑ 0 $27.50 ↑ $15.62
The Terrace 7 196,215 1,239 ↑ 19,000 $27.50 ↑ $15.59
5723 2015 AQUILA Austin Market Report
FAR SOUTHWEST MICROMARKET COMPETITIVE SET BUILDINGS
Building Name Net Rentable Area
Direct Available SF
Sublease Available SF
Asking Rental Rate
Estimated OpEx
3700 San Clemente 249,870 51,934 ↓ 0 $29.50 ↑ $11.50
3900 San Clemente 251,146 0 0 $25.00 $13.93
5000 Plaza on the Lake 118,063 6,162 ↑ 9,980 $26.50 ↑ $14.57
7000 West at Lantana 1 & 2 136,075 0 0 $24.50 $12.13
Canyon at Wild Basin 74,580 12,579 ↑ 1,283 $24.00 ↑ $11.60
Capital Ridge 216,511 0 0 $30.00 $10.56
Cielo Center 270,711 16,483 ↑ 3,371 $19.50 $12.55
CityView 1 46,702 0 ↓ 0 $20.50 $10.55
CityView 2 47,809 0 0 $20.50 $10.55
CityView 3 48,044 6,794 ↑ 0 $20.50 $10.55
CityView Center 137,763 0 24,478 ↓ $25.00 ↑ $11.79
Crystal Mountain 1, 2 & 3 61,762 7,920 ↓ 1,590 $25.00 ↓ $9.41
Dimensional Place I 220,000 0 0 $24.00 $12.42
Dimensional Place II 156,000 0 0 $24.00 $12.42
Encino Trace I 161,606 0 0 $23.50 $11.00
Escalade Bldg A 56,701 9,440 0 $19.50 ↑ $11.92
Escalade Bldg B 56,701 2,083 ↓ 0 $19.50 ↑ $11.92
Lake Pointe II 42,933 0 ↓ 0 $24.00 ↓ $8.42 ↑
Las Cimas I 85,000 3,700 0 $24.50 $14.18
Las Cimas II 156,069 19,402 ↑ 0 ↓ $26.00 $13.83
Las Cimas III 157,418 1,135 ↑ 3,718 $26.00 $13.93
Las Cimas IV 138,008 2,587 ↑ 1,590 ↓ $26.50 $14.47
Lost Creek Point 73,026 5,308 0 $18.00 ↓ $12.35 ↓
Parkway at Oak Hill I & II 145,475 1,779 0 $23.50 $13.07
Plaza 290 63,163 3,825 ↑ 4,002 $18.00 ↑ $11.37 ↑
Plaza on the Lake I 122,530 8,936 0 $26.50 ↑ $13.84
Plaza on the Lake II 111,166 0 0 $26.50 ↑ $14.96
Rialto I 77,872 7,302 ↑ 0 $23.00 ↑ $11.63
Rialto II 77,508 1,588 ↓ 36,421 $23.00 ↑ $11.63
San Clemente Bldg B 90,267 0 0 $26.50 $14.05
The Enclave 44,704 0 0 $17.00 $8.37
The Summit 1-5 865,832 52,939 0 $25.00 $11.84
Travis Oaks 123,434 7,128 ↑ 2,384 $22.50 $12.09
Vista Ridge I 75,131 10,233 ↓ 0 $17.50 $11.33
Westlake Place 61,184 8,836 ↑ 0 $19.50 ↓ $10.50
Wild Basin Atrium Bldg A 67,500 0 0 $16.50 $9.31
Wild Basin I 60,498 0 0 $19.00 $11.40
Wild Basin II 74,626 0 0 $19.00 $11.37
58
YOURNOTES:
5923 2015 AQUILA Austin Market Report
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Austin, Texas Skyline; Photo courtesy of Katie Haugland
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