David Bremer is an executive vice president at Colliers in Austin, Texas. He has over 25 years of experience in the commercial real estate industry, with a primary focus on tenant and buyer representation in the office sector. His technical expertise in occupier services includes high-growth strategies, complex sublease dispositions, and risk mitigation through lease structuring.

Where in Austin is the hottest office market? Are there any outside areas to look out for as up-and-coming?

The demand in different submarkets varies based on the size of the office requirement. The Domain continues to attract the largest number of high-end requirements due to its “like downtown” quality, quick access to the Mopac Expressway, and walkability, combined with easier parking and lower rental rates than downtown. However, Downtown Austin is a close second, still commanding strong interest for small and large users.

For smaller office requirements, demand is more evenly spread city-wide; however, there is a clear preference for projects with easy ingress/egress and proximity to food and entertainment. This includes projects located just outside downtown, as well as those with easy access to Mopac from Hwy 71 up to The Domain.

In contrast, the office locations like those off Capital of Texas Highway and 2222, and far Southwest Austin, have seen the least activity recently and increased negotiability to counteract that.

For up-and-coming areas, North Central Austin is the one to watch. The area has always had a plethora of lunch, coffee and after-hours establishments, but only recently has office development started to take place there.

How does Austin’s office market compare to other areas of Texas?

Core business needs are still driving decisions for smaller users–namely, budgets, proximity to employee housing, and overall building/space quality.

For mid-sized and larger companies, the trend of “flight to quality” remains strong. These tenants continue to shop for amenities that will help entice employees to come back to the office. These frequently sought-after amenities include high-quality fitness centers with showers and towel service, employee lounges, shared outdoor spaces, conference facilities, and on-site food etc.

In response to growing competition for tenants, some landlords are pushing the envelope with unique amenities such as pickleball courts, golf simulators, etc., to help differentiate their properties. The more a workplace can serve as a one-stop shop for food, fitness, decompression, and productivity, the easier it becomes to drive in-person attendance.

How does Austin’s office market compare to other areas of Texas?

Austin continues to be the premier destination for startups, mid-size tech companies, and satellite tech offices for larger tech firms. While the city has long been known for its tech dominance, it has seen growing success in sectors like financial services and other professional services.

Looking outside of Austin’s unrivaled access to a highly educated employment pool, other cities in Texas do tend to gain advantages for some users. For example:

• San Antonio has more affordable office space and a generally lower employment cost, making it highly attractive for service-oriented businesses and call centers.
• Houston continues to dominate the energy sector, has a wide range of micro-markets to choose from, and is generally at a lower cost.
• Dallas is an attractive market for large-scale offices and corporate headquarters, benefiting from a deep inventory of office product, abundant housing, and its status as a major travel hub.

Despite its heavy reliance on tech, Austin’s office market has held its own, and in many cases, outperformed these other Texas markets.

What are some advantages and disadvantages of the overall Austin real estate market?

Austin continues to be rightfully viewed as a market where employers can tap into a highly educated workforce and successfully recruit talent from other markets across the country. The combination of a deep labor pool, general quality of life, a favorable statewide business climate and an extremely vibrant tech ecosystem will continue to drive long-term interest and activity.

The city’s primary disadvantages are cost-related. Austin’s office space, employee housing and mid-level wages remain significantly more expensive than other Texas cities.

What is the forecast for the office market? What excites you most about the future?

Activity is expected to remain steady for 2,000-10,000 rentable square footage (rsf) users, which has been relatively robust over the past six months. Barring a major economic shift, I anticipate activity for larger users to build over the next twelve months gradually. That said, I don’t believe the number of new entrants to the market will be sufficient to offset the large blocks of space that came online in 2023 and 2024 as subleases, nor the additional inventory from new building deliveries. The recovery will be a slow one and I’d expect 2026 to remain firmly in “tenant’s market” territory.

As someone who specializes in Occupier Services, representing users when leasing or purchasing their office, I’m always excited when it’s a tenant’s market. It results in my clients having more options and generally ending up with better deals—more favorable lease terms, rates, quality and/or flexibility. Transactions end with a smile versus a sigh.

I’m also encouraged by the widespread focus on building amenities. As someone who comes to the office five days a week, I see firsthand how beneficial it is to be in a quality building with amenities that let me relax with a workout or outdoor coffee break without needing to drive.

What types of companies are driving demand right now?

Looking at the deals in the market list, it’s still going to be heavily weighted toward technology companies market-wide. However, Austin continues to see professional services companies (financial, accounting, legal, etc.) grow in both number and size.

How are companies adapting their office strategies in today’s environment?

Honestly, many companies are still trying to figure out their long-term office strategies. Most employers have gradually increased their expectations for employees returning to the office, but the majority continue to be somewhat cautious with their strategies. Until those employers can better predict both office attendance and economic certainty, many will continue to strive for flexibility. For those occupiers that have a good understanding of their mid- and long-term office needs, we’re seeing two key trends: (1) Maximize up front landlord incentives to provide a top notch finish out while avoiding and/or minimizing capital expenditures, and (2) A strong emphasis on “quality of life” within the office by prioritizing access to personal and building amenities, quiet spaces, high-quality meeting rooms, etc.

What advice would you give tenants searching for office space in Austin? Take the time to discuss all aspects of your short- and long-term needs and identify what an ideal solution would include—location, quality, layout, reasonable budget, and so on.

From there, your representative should be able to provide all the necessary information to come up with a plan of action. Use drive-time studies and employee addresses to confirm that the target location makes sense. Review real-world pricing and comparable deals to validate your expectations around quality and cost, or to quickly pivot if adjustments are needed. If appropriate, bring in an architect to discuss design trends and help determine the right configuration and size for an efficient, high-performing and high-quality work environment.

With all of that in hand, map out a timeline to accomplish every step: negotiations, tours, lease, construction, and furniture, fixtures and equipment plans. The goal is to give yourself enough runway to maximize negotiating leverage while avoiding the need for last-minute “under duress” decisions.

The name of the game is to start discussions early. If you go through this process and determine you’re best suited by waiting 3-6 months, the early work won’t go to waste. It will all carry forward and give you a head start when the timing is right.

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