Although the direct availability rate for commercial office space in Round Rock rose to 9.3% during the first quarter of 2021, the city remains one of the most sought-after in the Greater Austin area.

This is according to a market report from Austin-based commercial real estate and brokerage firm Aquila.

That figure is up slightly from 9.2% in the fourth quarter of 2020. A year before, in the first quarter of 2020, the rate was 8.5%.

The Austin Office Market Report from Aquila uses the Round Rock city limits to define its office real estate market. It was published in early May and shows the availability rate was the second lowest in the region compared to 14 other regional markets in the Austin area. It is second only to the Mueller submarket region, which had a Q1 availability rate of 0%.

For sublet office spaces, the availability rate in the first quarter of 2021 was 3.5%, down slightly from 3.8% in the fourth quarter of 2020. This rate represents the availability of office space on a subletting basis in which a tenant leases the office space they are renting from a landlord to another tenant. In the first quarter of 2020, this rate was at 0.9%.

Aquila uses an availability rate to refer to office space available for purchase or rent, which the report justifies by reasoning that a vacant office is always available, but an available office is not always vacant, as property owners may begin leasing an office space while an existing tenant occupies it.

The figures represent office space that is ready to lease and not under construction. There are several office developments under construction in Round Rock, such as The Center at Gattis at 2261 Gattis School Road, which will have 30,000 square feet of office space, according to developer BlueAcre Development.

Another office building in progress is City Centre 2 at 551 I-35, which will offer 125,000 square feet of Class A office space.

In the report from Aquila, Senior Associate Taylor McHargue said the Round Rock area may see increased development once the majority of Austin-area employees return to work, as “traffic in Austin will be worse than ever before.”

Aquila Market Research Expert Kirk Silas said Round Rock may become an appealing option for businesses once more Class A or high-end office space becomes available, due to affordability.

"Whether they’re already in Austin, or maybe even tenants that are coming to Austin for the first time or trying to grow their presence in Austin, I think those [spaces under construction] could give some really interesting opportunities for space that may be a little more affordable out there,” Silas said.

One of the large Class A office space projects will be The District, which had its first reading approved by the Round Rock City Council on June 10. Silas said The District is planned to offer 3 million square feet of office space once complete, and it will be similar in size to The Domain in Northwest Austin.

Silas said businesses looking to acquire offices in the Austin area may choose peripheral cities such as Round Rock to conduct their business operations in order to avoid heavy downtown traffic.

"We really think that the fringes of Austin and the suburbs are probably going to be where we start to see some more growth over the next few years,” Silas said.