Austin Industrial Market | Q2 2017
Austin’s industrial market is still fairly tight , vacancies did move upward since the 1st Quarter of 2017. We are still hovering below 9% vacancy rates. In some sub-markets the vacancy rates are as low as 2.2% , currently the Northwest area of Austin has the lowest vacancies. We tend to get a lot of calls regarding industrial space that is below 4000SF and a prospective tenant wants a dock high and 18 wheeler access. For tenants looking for this type of solution, it will be a tough haul. Within the Austin Industrial Market, a warehouse that is built with a small footprint below 4000SF will not have 18 wheeler access with a dock door. Our advice on this would be to change your parameters.
Industrial Market pricing
Leasing rates for the Austin Industrial Market are staying unchanged for the most part heading into Q2 2017, with average rates coming in around $10.50/psf /yr or $0.88 cents per square foot per month without NNN expenses included. Expect most of the industrial properties to be prices into the high $0.80 cent range to $1.10 ranges for the near future with expenses. It always depends on the vacancy and sub-market you are interested in, it is not a static number. Also it is always important to keep in mind as a tenant or a buyer, that the market you are interested in is the market you should focus on, comparing your market if you are out of state or in a different city is a futile exercise and really doesn’t have a bearing on what is going on in the target market you are interested in. If you are budget constrained, then you should look at markets that support your expense forecasts for rent and not make the mistake of expecting the Austin Industrial Market to change for you. When demand is high and supply is low , we will always have higher rates for leasing and purchases of warehouse properties in Central Texas.
The highest concentration of warehouse product will be in South East Austin over 600,000SF of new construction being developed. There is a push in the Austin industrial market for new inventory and with the current positive absorption in the near term, it is predicted to be stable without a big correction, however nobody ever really knows how the market will move timing wise.