Austin's Rising Coworking Conglomerate

Opening Bell 🔔: Industrious is having itself a year here in Austin. The benefactor of a $400M acquisition curtesy of CBRE earlier this year has the coworking conglomerate eating up space all over the city. The latest lease comes at 21,660 SF at Aquila’s brand new Alto project in East Austin.

Market Snapshot 📸:

Dive Deeper 🤿: Riding on the back of their Victory Plaza lease earlier this year, Industrious just hit 200,000 SF of coworking space in the Austin market.

They’ve nearly doubled their footprint since May 2024, not the kind of rapid growth you usually see in a down market like we’ve been experiencing.

A sign of the times, flexible yet high quality space continues to be prime real estate. These leases are all in Class A buildings with a majority being in brand new buildings like Victory Plaza and Alto. With the sublease market continuing to rise coupled with economic uncertainty, owners are viewing coworking tenants as a safe bet on getting their space filled.

Pro Insight 🧑‍🏫 : At a time where most are reevaluating their real estate needs (just look at Vista Equity Partners listing 40% of their Republic Lease for sublease), Industrious is growing at a rapid rate. While we see the sublease market continue to grow; coworking companies eat up space at a rate once reserved for the tech giants. It’s not just Industrious that’s benefiting, companies like The Malin are seeing the opportunity in the Austin market and have opened up locations in the city.

Final Buzzer 🚨: Coworking companies are poised to take advantage of uncertain times as they offer more flexibility and de-risk a lot of the real estate costs for traditional office tenants, even if they end up paying more in the short-term for the flexibility.

While established companies look to reevaluate their real estate footprint, companies on the come up like ClosingLock stand to benefit from shed sublease space. Look for a continued shift towards smaller, shorter leases in the months ahead as companies wait this extended uncertainty out.

We’ll see you next week,

Cory