Highlights from the 5th Annual Austin Commercial Real Estate Summit by REDnews
Key Topics Explored
The summit covered a wide array of timely topics crucial to Austin's commercial real estate scene. Here’s a breakdown of the primary discussions that kept attendees engaged:
Vacancy Rates and Leasing Trends
Experts discussed current vacancy rates across Austin’s commercial spaces, noting shifts in leasing trends that influence tenant demand. Leasing behaviors in Austin’s diverse submarkets highlight where growth is expected, as well as areas requiring strategic repositioning.Rental Rates and Demand
With demand constantly changing, speakers provided updates on Austin’s rental market. The discussion touched on areas seeing the highest rent growth, as well as how fluctuating demand affects property valuation and future investments.Development & Construction Market Update
Attendees heard insights on the latest developments in Austin’s booming construction market. From high-rise office spaces to new multi-family units, experts gave an in-depth look at ongoing projects and anticipated trends in construction costs and project timelines.Investment Market Update & CAP Rates
This panel delivered an update on Austin’s commercial investment market, emphasizing CAP rates and how investment trends are shaping the region’s market dynamics. Investors gained valuable insights into capitalizing on Austin’s growth while navigating the complexities of today’s investment landscape.Changing Tenant Needs and Broker Insights
As tenant needs evolve, so must broker strategies. Panelists shared insights into what today’s tenants are prioritizing in terms of space design, amenities, and overall property functionality, especially in response to shifting work models and increased focus on sustainability.Tenant Improvements & Design Trends
Tenant improvement budgets and design trends were major talking points, as experts discussed the shift toward adaptable spaces that accommodate both hybrid work and unique tenant requirements. These insights are especially relevant for brokers and landlords seeking to stay competitive in a tight market.
Distinguished Panelists and Speakers
The event was marked by a lineup of seasoned professionals who are at the forefront of Austin’s CRE industry:
Logan Dalgeish – Principal, Cresa
Carl Condon – Principal, Avison Young
Drew Hanish – CEO, PRAVO Construction
Alex Taghi – Director of Office & Industrial Services, Franklin
DeLea Becker – Owner/Broker, Beck-Reit Commercial Real Estate
Each speaker brought unique perspectives, addressing questions about the future of Austin's commercial real estate and sharing their experiences navigating a changing market.
Takeaways
Beyond the presentations, the summit allowed attendees to connect with industry peers, potential partners, and clients. This setting encouraged meaningful exchanges, giving everyone from brokers to investors a chance to discuss strategies and gain valuable contacts in the Austin real estate community.
How Austin’s Office Market Is Evolving: Lessons for Landlords from the REDNews Panel
The Austin office market is changing rapidly, and landlords need to adapt to keep pace with tenant demands and shifting market dynamics. At the REDNews 5th Annual Commercial Real Estate Summit, industry experts shed light on these transformations, highlighting trends, strategies, and key takeaways. As a landlord at 2422 E 7th Street, I see this as an opportunity to provide the kind of spaces tenants are clamoring for—tenant-ready, walkable, and amenity-rich.
Here are the top insights from the panel and what landlords should do to stay ahead.
The Rise of Trophy Products: What Tenants Want
In today’s competitive office market, tenants aren’t just looking for a workspace—they’re looking for an experience. Buildings that were once considered sufficient now need to evolve into trophy products to attract top-tier tenants.
What Defines a Trophy Product?
1. High-Quality Amenities: Tenants want spaces that feel premium—features like big gyms, biophilic designs, rooftop patios, and high-end finishes matter.
2. Better Locations: Proximity to coffee shops, grocery stores like Whole Foods, and walkable districts like East Austin are a must.
3. Collaborative Environments: Breakout spaces, huddle rooms for 4-8 people, and all-hands spaces for town-hall-style meetings are non-negotiable.
4. Blend of Hospitality and Corporate Feel: Tenants want their offices to reflect the welcoming, sleek vibe of modern hospitality spaces.
from the Panel: “Walkability tops the list in Austin. Tenants want to be able to step outside and grab a coffee or lunch without hopping into a car.”
Tenant-Ready Spaces: The “Easy Button” for Leasing
A recurring theme during the panel was the growing preference for tenant-ready spaces. In a time when many companies are downsizing or rethinking their office needs, the last thing they want is the hassle of managing a full design, permit, and build process.
What Makes a Space “Tenant-Ready”?
• Pre-Built Spaces: Move-in-ready offices with high-quality finishes, phone rooms, and branding-friendly reception areas.
• Spec Suites: Smaller, pre-designed spaces under 10,000 square feet are highly in demand.
• Minimal Customization Required: Tenants want ability to simply add minor personal touches—like a logo or a conference room—before moving in.
from the Panel: “Tenants don’t want the headache of TI work. Landlords must take on this ‘hassle factor’ to get deals done.”
Flight to Quality: Attracting the Right Tenants
Tenants are prioritizing quality buildings and landlords over quantity of space. A flight to quality means that landlords must deliver not only great buildings but also financial stability and strong amenities.
What Tenants Value:
1. Strong Landlords: Companies want to know their landlords can deliver on TI allowances, pay commissions, and maintain the property—even in a soft market.
2. Well-Maintained Amenities: Occupancy rates often correlate with the quality of a building’s amenities. When vacancy increases, poorly funded landlords let amenities slip.
3. Premium Finishes and Newer Buildings: Older Class B and some Class A properties are becoming functionally obsolete, creating a gap in the market for better spaces.
from the Panel: “What’s inside matters. Tenants want spaces that drive collaboration, innovation, and culture.”
The Talent War: Why Employees Matter More Than Ever
Even with remote work still prevalent, the drive to get employees back to the office is stronger than ever. Employers understand that collaboration fuels innovation, making office spaces vital to their success.
Key Features That Attract Talent:
• Collaborative Spaces: Think breakout rooms, huddle rooms, and social areas.
• Amenities That Foster Culture: High-end break rooms with soft seating, all-hands spaces for large gatherings, and café-style work areas.
• Location, Location, Location: Proximity to walkable amenities makes employees more willing to return to the office.
from the Panel: “In order to be innovative and drive business forward, companies need their employees back in the office.”
Landlord Strategies for a Soft Market
The current office market in Austin is soft, but the right tactics can still bring in tenants and maximize value.
Landlord Tactics:
Increased TI Allowances: Offer tenants an additional TI dollars per square foot or more to make leasing attractive.
Free Rent Periods: Concessions like rent-free months can help close deals.
Tenant-Ready Spaces: Move-in-ready offices that remove the hassle factor.
Flexible Lease Terms: Shorter lease periods and renewal options are appealing to cautious tenants.
Panel Insight: “Rental rates fall like a feather and rise like a rocket ship. Staying competitive now will pay dividends when the market rebounds.”
East Austin: The Future of Office Leasing
East Austin continues to be a hotspot for office leasing due to its walkability, amenities, and proximity to the Central Business District. Buildings in this area are attractive to tenants who value a blend of work and lifestyle.
What Sets East Austin Apart?
• Walkable Amenities: Tenants love having access to nearby coffee shops, restaurants, and entertainment.
• Community as an Amenity: Much like retail centers benefit from foot traffic, office buildings in East Austin thrive by being part of a connected neighborhood.
Case Study: A recent deal at T3, an eco-forward mass timber building, showcased the importance of unique, high-quality spaces. With walkability and sustainable design, it’s an example of the kind of property tenants want.
Challenges and Opportunities: The Road Ahead
As Austin grows into a more mature office market, landlords face both challenges and opportunities:
Challenges:
• Structural Vacancy: Older, less desirable buildings may face permanent vacancy.
• Work-from-Home Trends: Tenants need compelling reasons to bring employees back to the office.
• Rising Costs: Construction costs and NNN rates remain high, creating financial pressures for landlords and tenants alike.
Opportunities:
• Tech Resurgence: The tech sector could rebound strongly, driving demand for office space.
• Creative Reuse: Gutting larger floorplates into smaller, highly designed spaces can attract tenants.
• Future-Proofing: Investing in amenities, tenant-ready spaces, and sustainability ensures long-term competitiveness.
Why 2422 E 7th Street Is the Ideal Office Space
At 2422 E 7th Street, we’ve incorporated every insight from the REDNews panel to create a space tenants will love:
High-End Amenities: Designed with collaboration and culture in mind.
Eco-Forward Design: Sustainability with biophilic elements and eco-conscious architecture, prioritizing environmental impact .
Mass Timber Construction: Innovative mass timber design offers a warm, natural aesthetic while promoting sustainability and energy efficiency.
Walkable Location: Steps from East Austin’s vibrant coffee shops, restaurants, and retail.
Community as an Amenity: Much like retail centers, our space fosters networking and connections among tenants.
If you’re ready to lease, let’s talk. The future of Austin’s office market is bright, and 2422 E 7th Street is leading the way.
Final Thoughts: Adapt and Thrive
The Austin office market is at a turning point, but landlords who adapt will thrive. By focusing on trophy products, tenant-ready spaces, and walkable locations, you can meet tenant expectations and stay competitive. Whether you’re a company seeking space or a landlord looking for tenants, now is the time to plan for Austin’s next wave of growth.
Looking Ahead
As the Austin commercial real estate market continues its upward trajectory, insights from the REDnews Austin Commercial Real Estate Summit underscore the need for adaptability, innovation, and deep market knowledge. From tenant needs to CAP rate trends, this event highlighted the tools and strategies that real estate professionals must leverage to thrive in a competitive landscape.
