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Building Profiles
In the wake of various company layoffs and space
reductions, large blocks of sublease space opened up and resulted
in improved office conditions for tenants during the first quarter
of 2001. The remainder of the year is likely to see stabilized
rental rates in the suburbs and reduced rental rates downtown
as tenants finally see some relief. Overall, the first quarter
provided tenants with more options and some breathing room in
an extremely tight market.
Some buildings along North 360 that had smaller
subleases remained vacant for weeks after going on the market,
a trend that had not been seen in the area for several years.
While the northwest area immediately felt
the effects from this flood of available sublease space, the reaction
in the South 360/South Mopac area was somewhat less dramatic.
The high-demand area of the South Mopac corridor between 360 and
Bee Caves Road remained just so, although layoffs by one large
tenant put some 60,000 sq. ft. back on the market. Announcements
were made for new Class A office buildings along Bee Caves Road
- a high-demand area with very little existing Class A product.
One building is set for the Mopac end of Bee Caves and the other
at the Loop 360 end. Delivery is scheduled for 2002, and the combined
square footage could exceed 600,000 sq. ft.
Downtown rates stabilized as the area prepared for up to 500,000
sq. ft. of space in early 2002. Amidst all this, one developer
announced ambitious plans to build a 33-story high-rise on Congress
Avenue.
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