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Austin ranks No. 4 in U.S. for highest office vacancy rate, per report
Imagine all of those offices sitting empty in downtown Austin.
A new study of the office rental market in the U.S. has unfortunate news for Austin's office scene: It puts the Austin metro area at the fourth highest rate of office vacancies nationwide.
According to a report by an Indian service provider courting U.S. markets, Outsource2India, 16.7 percent of all office space in Austin is sitting empty — a figure that has grown by a staggering 12.1 percent since 2023. So don't go blaming the pandemic, at least not entirely.
The total square footage of Austin's empty office space adds up to nearly 22.54 million square feet, or 392 football fields, as the study calculated.
Metropolitan areas in Texas and California dominate the top 10 of the list. San Francisco tops everything with a staggering 21.7 percent of office space vacant — meaning that more than one out of five offices are empty.
Houston comes close at No. 2 with a vacancy rate of 18.6 percent, followed by Dallas at No. 3 on the list, with an 18 percent office vacancy rate.
While climbing office vacancies have been attributed to the pandemic, the report notes that the situation has worsened over the last 12 months, with an average increase in vacancy rates of 11 percent — underscoring the significant challenges in commercial real estate right now.
The study dovetails with other workspace trends, including the rising demand for and popularity of remote and hybrid professions since the pandemic. In a 2020 analysis, Forbes said companies prioritizing the "remote work revolution" saw an increase in teleworker productivity, performance, engagement, retention, and profitability. In 2024, secondary benefits of flexible work environments include smaller carbon footprints, more women in the workplace, reduced operating costs, and more.
Outsource2India suggests major businesses in cities like Dallas will need to reimagine their work culture and office spaces in order to compete with flexible work models.
“As remote work continues to reshape workplace dynamics, there is a pressing need for this market to evolve and adapt,” the report says.
After all, Austin commutes aren't getting any easier (nor are the city's drivers getting any better), and more workers are starting to look for less commute-heavy vocations in various suburbs.
The top 10 metro areas with the highest office vacancy rates are:
- No. 1 – San Francisco, California
- No. 2 – Houston, Texas
- No. 3 – Dallas, Texas
- No. 4 – Austin, Texas
- No. 5 – Washington, D.C.
- No. 6 – Chicago, Illinois
- No. 7 – Denver, Colorado
- No. 8 – Phoenix, Arizona
- No. 9 – Los Angeles, California
- No. 10 – San Jose, California
Outsource2India tracked office rent prices in major U.S. metropolitan areas for 2023 and 2024 to discover the top 10 metro areas with the highest office vacancy rates using data from the National Association of Realtors (NAR).
The full report can be found on outsource2india.com.
