Office Vacancy Remains High in Austin, But Signs of Recovery Emerge

Is now the best time to reconsider your office layout or seek expansion in the Austin Metro market? As a small to mid-market business owner, now may be the ideal time to consider moving offices, expanding your footprint, or renegotiating your lease.  

Vacancy Rates Remain High in Austin

According to Austin Business Journal, Austin’s office vacancy rate is now holding steady at 25% from Q1 and Q2 of 2025. Notably, Downtown Austin is even higher at 31.8% of the area’s 16.8 million square feet of office space. Meanwhile, North Austin and the Domain area continues to thrive with growing competition for space. These areas remain hubs for tech companies and corporate campuses. For example, Nvidia just announced expansion plans for The Domain. 

If you’ve been previously outpriced by a downtown Austin lease, now may be the time to invest for your business.  

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Commercial Leasing Activity on the Rise

While vacancies remain high in some areas of the town, leasing activity continues to trend upwards. This uptick suggests that companies are feeling comfortable enough to make long-term decisions again after economic uncertainty earlier in the year.  

Despite the uptick in leasing activity, Austin still recorded a negative net absorption across Q1 and Q2 of 2025. A negative net absorption in real estate means that more commercial or residential space is becoming vacant rather than remaining occupied in a specific period. 

Essentially, the demand is lower than the supply, which places mid-market businesses at an advantage. If you’re considering investing in a new commercial lease in Austin, consider consulting with legal counsel to ensure this is the best long-term investment for your business.  

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Momentum is Building in the Austin Market

From Zendesk signing for 33,000 square feet on East Fourth Street to AMD expanding into Southeast Austin, these transactions may suggest momentum is building.  

If you’re a mid-market looking to grow, you may want to act before this wave of  larger leases drives prices back up in competitive areas.  

Is Now the Time to Expand?

• Vacancies are high and favors tenants, especially in Downtown Austin

• Net absorption is negative, meaning opportunities still outweigh demand

• Larger players like Zendesk and Nvidia are re-investing in the Austin market, enabling small businesses to expand before vacancies lower

Whether you are seeking more space for your business or hoping to renegotiate your lease, the real estate attorneys at Richards Rodriguez & Skeith can help you throughout the process and ensure you are making long-term, impactful choices for your business.  

Connect with our team of commercial attorneys today to fully access your options and make an informed choice.