austin companies large office space sf square

techsuch May 9, 2021 0 Comments

What are the Largest Companies in Austin Today?Amazon, Apple, Oracle, Facebook, Indeed; these companies and more have filledthe headlines of commercial real estate news in Austin for years. Stories ofcompanies leasing huge swaths of office space, building new campuses andpreleasing years in advance have now become so common that they are moreexpected than they are surprising. But how much space do companies like theseactually occupy in Austin? Are they really becoming the dominant players inthe market, or do transactions with smaller companies still comprise the bulkof the leasing activity in Austin?Read Now: Why Austin, Texas Is One of the Best Cities for BusinessAs of January 2021, these are the largest companies in Austin, Texas:Rank | Company —|— 1 | 3M 2 | Amazon 3 | Amazon 4 | Amazon 5 | Amazon San Marcos Fulfillment Center 6 | AMD 7 | Apple 11 | Charles Schwab 12 | Dell Children’s Hospital 13 | eBay 14 | Electronic Arts 15 | VRBO 16 | Facebook 17 | Facebook 18 | Flex Health 19 | Google 20 | Google 21 | IBM 22 | Indeed 23 | Indeed 24 | Intel 25 | Katerra 26 | Oracle Corp. 27 | Oracle Corp. 29 | Solarwinds 30 | Tesla 31 | Visa 32 | General Motors 33 | BAE Systems 34 | Apple 35 | Apple 36 | Q2 37 | BigCommerce 38 | SailPoint 39 | ARM Inc. 40 | Accenture 41 | Athenahealth 42 | Atlassian Software 43 | Bazaarvoice 44 | Centene Corporation 45 | Cirrus Logic, Inc. 46 | EZ Corp 49 | Genesis Today 50 | Google Download a full-size version of this map.* * *Originally published on August 13, 2019In this special report, we answer these questions and more by looking at: * Companies with greater than 150,000 sf in Austin today (by industry and location) * How the Austin Metro Statistical Area (“MSA”) compares to other competitive cities in terms of large tenants * Which companies are expected to expand their presence in AustinMETHODOLOGYTo do this analysis, we utilized CoStar to identify the major companies in theAustin MSA and determine the total amount of square feet they currentlyoccupy. We limited our search to existing and under construction office spaceonly, and classified a “large company” as one with greater than 150,000 sf ofoffice space within Austin’s MSA boundaries. The same methodology was followedto identify large companies in other MSAs.## Large Companies in Austin TodayToday, Austin is home to 46 companies occupying greater than 150,000 sf ofoffice space. Combining them together, this adds up to roughly 24 million sf.For comparison, the total square feet of office space in the Austin MSA is 109million.Of these companies, 28 are publicly held, 12 are private and six aregovernment entities.As one would expect, more than half of these companies fall under the “tech”category, including names like 3M, Dell, Apple and Facebook. Being the statecapitol, government offices also occupy a significant amount of space inAustin, ranging from the City of Austin and Government of Texas to the IRS andDepartment of Veteran Affairs.While a number of these companies are newcomers to the Austin scene, just asmany have been here for the long haul. Even looking back to 2008, companieslike Dell, IBM, Apple and Whole Foods had already established a significantpresence in our city, each employing more than 1,000 Austinites.1Pictured: Third + Shoal (middle). Facebook is the main tenant in the new Third+ Shoal development in Austin’s Central Business District, now occupying over900,000-sf in Austin. (Photo from CoStar).A few insights can be gleaned from the graph above, the most obvious being theconfirmation that tech companies really are occupying a lot of space inAustin. They account for 13.3 million of the 24 million sf total and hold thetop five spots in the ranking of largest Austin companies.Another insight is that there are a number of companies with significant leaseholds in Austin that, frankly, we rarely hear about. General Motors (“GM”),for instance, has more than 700,000 sf of office space spread across threebuildings, yet has only been mentioned in six commercial real estate articleson the Austin Business Journal since the start of 2018. Facebook, incomparison, has received a mention in at least 30 articles in 2019 alone as ofJune. While this is obviously due in part to the fact that GM has remainedlargely steady in its Austin real estate holdings while Facebook has beenactively expanding, one would still expect that a company of GM’s size wouldbe mentioned a little more frequently.## Locations of Large Companies in AustinThe distribution of the large companies in Austin offers more insight intowhere these large companies are looking for and locking that space down.As with many cities, Austin’s CBD is a hotbed for large tenants. The likes ofFacebook, Indeed and Google all call downtown Austin home, taking significantamounts of space in some of Austin’s biggest high-rises. Some of that largeleasing activity has even begun to cross to the east of IH-35 into EastAustin, as exemplified by Google’s lease at Plaza Saltillo.Looking closer, it becomes clear that the other hotbed of large leases inAustin is in the Northwest submarket, primarily concentrated in the Domain.This is not a surprising insight for anyone who has been keeping tabs on thesuccess of Austin’s “second downtown,” but it does give visual confirmation ofa trend we have been discussing for some time. A number of companies occupyingspace downtown also choose to open a second location at the Domain (thinkFacebook, Indeed, etc.) to better access the growing talent pool in NorthwestAustin.Both the CBD and Domain are the easiest location in Austin to deliver denseoffice space, likely explaining why large companies have chosen to locate inthose areas. You will also notice a number of unique pockets dotted aroundAustin, including the spaces occupied by the IRS in the southeast and Dell’scampus near Round Rock, where individual companies have managed to securelarge spaces in a specific building or campus.##### WANT THIS REPORT AS A PDF?Want to share this report with a colleague, save to your desktop for later, orprint a copy for your records? We know digital isn’t always the right format. For that reason, you candownload a free PDF copy of this report.## How the Austin MSA Compares to Other Competitive CitiesWhile this information is all well and good, it only paints part of thepicture. Knowing the largest companies is one thing, but how much influence dothose companies have on the office market in Austin?To better understand this, we looked at the total square feet occupied by thelargest companies in the Austin MSA and compared that to the total square feetof office space existing today. We repeated this analysis across a number ofdifferent MSAs to show how Austin compares to other locations.Austin’s 46 largest companies take up approximately 22% of the MSA’s officespace. This puts it very close to other competitive markets like Charlotte,North Carolina and Dallas-Fort Worth (“DFW”) and is well below San Jose,California, another one of the country’s technology hubs. To put this anotherway, for every five square feet of office space in Austin, one square foot isoccupied by a “large company”.However, the real comparison begins when looking at each market’s diversity interms of the average square feet per company. Spreading the 24 million squarefeet of space occupied by large companies in Austin across the MSA’s 46companies, the average space occupied per large companies comes out to roughly521,000 sf per company. This puts Austin at the second highest average in ourcomparison set, falling only behind the San Jose MSA’s average of roughly684,000 sf.### So what does this mean? In simple terms, Austin’s economy is more exposedto the fates of large companies.With fewer companies occupying more space on average, it can be inferred thatthe leasing activities of these companies are overweight drivers of demand. Ifthat demand were to suddenly cease, the effects would be felt more in Austinthan it would be in a market like DFW where there are 167 “large” companiescompared to Austin’s 46.## Which Companies Are Expected to Grow in Austin?The other aspect of this analysis is to not only look at what the largecompanies in Austin are today, but what companies are expected to grow inAustin in the future. Whether through proposed developments, major preleasesor announcements of expansions, there are a number of companies on this list.First, we’ll start with the obvious. Apple’s plans to build its 3 million sfcampus in Northwest Austin (2 million of which is planned to be office space)was major news in 2018 and will position Apple far above the other largeoffice occupiers in Austin in terms of square feet occupied.2 Because theproject is still proposed, it was not included in Apple’s total square feetnumber in the “Tenants with More Than 150,000 sf in Austin” graph above. Withconstruction slated to begin in August 2019, we shouldn’t have to wait long tobegin seeing the increase in jobs promised in Apple’s press release.3James Avery, the Texas-based jewelry company headquartered in Kerrville, hasannounced plans to open a second headquarters4 in Cedar Park. No details havebeen given yet on the square footage of the planned headquarters, but at anestimated 100 new employees and $13 million investment, the new developmentwill at least push James Avery closer to the 150,000-sf cutoff for a “largecompany” in Austin when combined with its existing 16,000 sf of office spaceat Tower of the Hills.5Another potential expansion at the top of everyone’s mind is WeWork’s. Thecompany acquired Waller Park Place at the end of 2018, which holds thepotential for roughly 3 million sf of development depending on what type ofproject is pursued.6 The site is in a prime location for development, but nonews has surfaced yet of whether WeWork has decided to build its own officetower or pursue some other venture. There have also been discussions thatWeWork has been considering a development at an alternative site prior topursuing Waller Park Place, so only time will tell how much higher on the listof large companies in Austin WeWork will find itself.Pictured: WeWork’s Domain office. The company recently acquired Waller ParkPlace, which holds the potential for roughly 3 million sf of development. Thiscould launch WeWork higher on the list of large companies in Austin. (Photo byScott Mason Photography)Zoho, a software company based in California that is currently occupying13,686 sf of office space in Austin, is planning to open a 100,000-sf officein southeast Austin in the coming years.7 The company plans to add as many as500 new jobs to its Austin team as a part of this expansion, and at 375 acres,the site should also offer room for future expansions.### It’s hard to say exactly how many jobs will be created as a result ofthese coming expansions, but in Austin’s current job market we can be certainthat those jobs will be filled quickly.As of March 2019, Austin’s unemployment rate was a mere 2.7%, compared to 3.8%Texas-wide8, and although California Governor Gavin Newsom hopes companies andemployees will “start focusing on [the progress California is making] and notjust that 13.3% damn tax rate,” it would not be a surprise to see Californialicense plates filling the parking lots at these new offices.9## ConclusionThe numbers presented in this study make it clear that Austin has a sizeable(and growing) collection of large tenants occupying space throughout the city.Spread across a number of industries, these tenants, whether publicly owned,private or government entities, give interesting insight into the makeup ofthe Austin office market today.In our fast-paced, quickly evolving market it is hard to say what the resultsof a similar study would reveal ten years from now, but what we do know isthat, for the time being, Austinites should not be surprised to see the namesof some of the largest companies in the nation posted on the exterior of ouroffice buildings.To save a PDF of this report, download your free copy below.* * *1Source: Austin Chamber of Commerce – Major Employers 20082Source: Austin Business Journal – $1B Apple Campus Coming to North Austin3Source: Apple Press Release 12/13/20184Source: Austin American-Statesman – Hill Country jeweler James Avery plans$13 million second HQ in Cedar Park5Source: CoStar6Source: Austin Business Journal – Rolling in fresh $2B from SoftBank, WeWorkbuys chunk of downtown Austin7Source: Austin American-Statesman – Software maker Zoho moving HQ to Austin,adding hundreds of jobs8Source: Bureau of Labor Statistics9Source: Austin Business Journal – As companies flock from California toTexas, Golden State governor punches back

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