AUSTIN, Texas — Downtown Austin is filled with cranes, but experts say a sizeable number of buildings do not have people working in them.
Since the pandemic, more people are working from home or have a hybrid schedule, which has greatly impacted office space vacancies.
Right now, the data isn't showing much improvement; in fact, it's getting slightly worse. Data from Angelou Economics shows office space vacancies in Austin increased by just over 1% this year.
- 2023 Q1 – 14.4%
- 2023 Q2 – 15.5%
- 2023 Q3 – 16.0%
Looking at the big picture, office space vacancies were at 16% in October. In 2022, vacancies were lower, at 13.1%.
Prior to the pandemic in 2019, just 7.5% of office spaces in the city were vacant. According to the data, vacancies have not been this high since 2003.
Keep in mind, there are a lot of office spaces under construction or that were just completed.
Angelou Economics Executive Vice President Matt Patton said many companies are currently pausing and reevaluating how to reuse office spaces.
"Whether that's being converted to flex spaces or reimagining some of the industrial spaces – flex office, industrial hybrids or even converting some of these into residential spaces," Patton said. "I think there are a lot of questions being asked and a lot of analysis being done behind the scenes about what's the best advice use for each of these spaces."
Patton said there's a big chance that in the future, we could start seeing businesses next to each other that we wouldn't typically see, like an advanced manufacturing 3D printing company next to a restaurant.
According to data from the Downtown Austin Alliance, as of October, the number of employees working in offices downtown is still far from pre-pandemic levels but is improving.
In 2019 there were, on average, between 50,000 and 60,000 employees working downtown in-person during the week. This year, it's just under 40,000.
Patton said despite these numbers, Austin's office space market is relatively healthy compared to others and will continue to thrive.
"Austin is still a very in-demand place," Patton said. "There are still hundreds of people moving here every single day," said Patton. "There are still many growth opportunities, whether that's downtown or it's more distributed across the city."
Boomtown is KVUE's series covering the explosive growth in Central Texas. For more Boomtown stories, head to KVUE.com/Boomtown.