Austin's industrial rates reach new heights

Austin’s industrial market construction slipped a little, but the asking rates aren’t falling. The vacancy rate saw a slight drop and the net absorption saw a large positive increase over the quarter.  Citywide average vacancy fell to 7.1% over the quarter and positive net absorption reached 141,773 square feet, and industrial space under construction decreased only by 9,500 square feet in the second quarter. Some of the asking rates for the Austin market are at an all time high. 

Austin’s citywide average rental rates increased over the quarter from $9.56 per SF NNN to $9.81 per SF NNN, the highest it has ever been. Citywide Flex/R&D rental rates slightly decreased to $11.30 per SF NNN, while this quarter’s Warehouse/Distribution rental rates are also the highest they have ever been, at $7.63 per SF NNN.  

The only major building that delivered in Q2 2016 was Met Center 12, a 72,000 square foot building in the Southeast submarket.  In Q2, 1,787,440 square feet of industrial supply was under construction, including two new projects totaling 110,715 square feet. One of the projects is a 62,500 square foot building at 7307 Burleson in the Southeast submarket.

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