Austin Warehouse Market Report Summary 2016
The Austin warehouse property market continues to move towards lower vacancies and high demand especially for lower square footage properties. Any tenant expecting “a deal” on a 2 year or less commitment should forget about it, it won’t happen near term. Just telling the truth folks, of course you can always find this out on your own if you want. In 2009 the vacancy rates for warehouse properties hovered at 14%. Today they are at 7% vacancy, that is right a 50% cut in availability. With less availability comes higher lease rates, however there may be some pockets for lower rates with a term commitment of 3- 5 years.
Small warehouses with dock or 18 wheeler access will remain very tight and difficult to find, for some brokers who are not specialists in this like Shire Commercial, a client may be led to believe there are plenty of choices, sorry but there are not. Net absorption of Austin warehouse properties has remained positive moving into 2016. Average lease rates have increase approximately 13% .
Being flexible as possible is the key with location preferences will continue to be a critical strategy. The most recent headlines for Q42015, was ” 1.2 Million Sq Ft of Tenant Demand Brings Down Year End Vacancy” Average Asking rates are $0.80 psf per month currently. The delta between net absorption and completions is a measly 4,000SF in other words a wash. For Austin proper rates have increase $0.04 cents per sq foot. In a most recent listing , Shire Commercial picked up a 3750SF warehouse with 2 grade levels and 1 dock door and it was leased up within about 6 hours.