A high-profile anchor tenant in one of Austin’s most anticipated office towers is pulling back ahead of move-in.
Vista Equity Partners is looking to sublease roughly 40 percent of its future headquarters at The Republic, a 48-story office tower under construction in downtown Austin, CoStar reported.
The firm has listed 79,500 square feet for sublease across the tower’s top three floors, the 41st through 43rd levels, at 401 West 4th Street.
The move comes nearly three years after Vista pre-leased 200,750 square feet, which helped launch construction of the nearly 820,000-square-foot tower, developed by Lincoln Property Company, Phoenix Property Company and DivcoWest. The lease was one of the largest in Austin since the start of the pandemic and was widely credited with giving the developers confidence to start construction.
Vista’s partial retreat is a prime example of a broader trend: even tenants upgrading to Class A towers are paring back commitments amid hybrid work shifts, economic uncertainty and persistent market softness.
“This trend is not isolated,” Partners Real Estate’s senior vice president of research Steve Triolet told The Real Deal. “Despite new construction and top-tier amenities, these high-profile subleases suggest that the Austin office market’s recovery remains elusive, with elevated vacancy rates likely to persist for the foreseeable future.”
The sublease adds to a glut of available office space in Austin, where the regional vacancy rate recently passed 17 percent, one of the highest in the country. Sublease availability alone is nearing 5 million square feet, and off-market listings, like Google’s offering at Sail Tower, suggest that inventory may be even deeper than reported.
Vista is expected to remain one of The Republic’s largest tenants despite the shakeup. The firm is also seeking to sublease its current 73,400-square-foot space at Frost Bank Tower.
Other tenants at The Republic include Kirkland & Ellis, O’Melveny & Myers and Pillsbury Winthrop Shaw Pittman, which have each committed to sizable leases as the tower nears delivery later this year.
— Judah Duke
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