Austin Office Tenant Outlook

As 2010 reaches the halfway mark, signs are pointing to positive absorption as tenants are becoming increasingly comfortable with their business projections, making for happier tenants and landlords alike. Across the country, many local businesses seem to have shed the fear that paralyzed them in 2009. Many companies were so concerned about the economy in 2009 they were unwilling to relocate, plan an expansion or sign a long-term renewal.

Many of the transactions that were put on hold in 2009 seem to be resurrected as the economy has stabilized. With the credit crunch halting any new commercial development in suburban submarkets, existing buildings, both shell and second generation, should see an increase in tenancy as competition for tenants heats up as landlords continue to entice tenants with generous concessions for signing long-term leases.

The second half of 2010 should continue the trend towards more confident tenants and hungry landlords. As the fear of the economic downturn fades, the office market should continue to improve and tenants will become more willing to make long-term commitments.