Austin Industrial Q1
Accelerating success.
Key Takeaways
• Net Absorption: 3 million square feet, a substantial increase from 1.8 million square feet in Q4 2023, reflecting a rebound in demand
• Overall Vacancy: 12.3%, a slight decrease from 13.5% in Q4 2023, indicating absorption outpaced new supply
• Under Construction: 8.9 million square feet, down from 10.4 million in Q4 2023, highlighting a slowing pipeline
• Asking Rents: $14.30 per square foot, up from $13.51 per square foot in Q4 2023, showing the market’s continuing appeal
Austin’s Industrial Pulse: Balancing Growth and Stability in Q1 2024
Austin’s commercial real estate market showed resilience and growth in the first quarter of 2024, maintaining momentum from 2023. The total inventory grew to 88.9 million square feet, reflecting the continued expansion in industrial development. New supply was 2.3 million square feet, and net absorption surged to 3.0 million square feet, marking a positive shift in demand, despite the ongoing speculative construction.
Notably, the construction pipeline showed a decline, with 8.9 million square feet currently underway, compared to 10.4 million square feet in the previous quarter. This deceleration suggests a potential rebalancing of supply and demand.
Austin’s robust technology sector, coupled with significant industrial developments like Tesla and Samsung’s expansions, continues to attract a wide array of industrial tenants. The city’s favorable business environment and tech talent pool position it well to embrace continued industrial growth, even as market forces balance out through 2024 and beyond.
Market Indicators
Market Trends
Vacancy rates, while elevated at 12.3%, demonstrated a slight improvement from the previous quarter, indicating that demand is catching up to new supply. The rental market experienced growth, with overall asking rates increasing to $14.30 per square foot, reflecting Austin’s sustained appeal to diverse industrial tenants.
Last Yr Last Qtr Current 23Q1 23Q4 24Q1 Total Inventory (in Millions of SF) 77.3 86.7 88.9 New Supply (in Millions of SF) 1.9 3.9 2.3 Net Absorption (in Millions of SF) 0.9 1.8 3.0 Overall Vacancy 7.0% 13.5% 12.3% Under Construction (in Millions of SF) 13.6 10.4 8.9 Overall Asking Lease Rates (FS) $ 11.16 $ 13.51 $ 14.30 Square Feet (Millions) Vacancy Rate Lease GAF Energy 110 SE Inner Loop Georgetown | 449.6k SF Lease Cangshan 201 Velocity Georgetown | 158.3k SF Lease Wondercide 3106 Longhorn Blvd North | 42.6k SF Lease FMT 500 SH-130 Georgetown | 187.6k SF Lease ProLift Rigging Co. 1305 Opportunity Blvd Hays County | 229.3k SF
Historic Comparison 3.9% Unemployment Rate 4.19% U.S. 10 Year Treasury Note 3.82% GDP - Annual % change yr/yr
Vacancy Rate 12.3% Net Absorption 3.0M SF Overall Asking Lease Rates $14.30/SF Under Construction 8.9M SF
Recent Transactions
YOY FORECAST YOY FORECAST YOY FORECAST YOY FORECAST Industrial Austin Q1 0% 5% 10% 15% 0 2 4 6 8 10 12 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 New Supply Absorption Vacancy Rate
Colliers | Austin | 24Q1 | Industrial Industrial Austin Q1 Existing Properties Vacancy Net Absorption Construction Rent Submarket Bldgs Total Inventory SF Direct Vacancy Rate Sublease Vacancy Rate Total Vacant SF Vacancy Rate Current Vacancy Rate Prior Qtr Net Abs Current Qtr SF Net Abs YTD SF New Supply YTD SF Under Construction SF Average Rate (NNN) Warehouse/Distribution Cedar Park 7 453,938 0.0% 0.0% 0 0.0% 0.0% 0 0 0 333,430 N/A Central 15 680,081 12.6% 0.0% 86,000 12.6% 12.8% 750 750 0 0 $18.00 East 37 2,619,721 3.6% 0.5% 105,873 4.0% 8.0% 103,181 103,181 0 1,145,417 $15.63 Far Northeast 64 10,860,521 6.5% 1.1% 821,390 7.6% 8.3% 76,197 76,197 0 1,267,949 $16.32 Far Northwest 9 393,809 3.2% 0.0% 12,500 3.2% 2.5% (2,500) (2,500) 0 0 $17.00 Georgetown 70 8,814,708 30.7% 0.0% 2,706,158 30.7% 38.4% 1,193,393 1,193,393 836,229 560,327 $11.69 Hays 75 10,278,229 17.5% 1.1% 1,906,162 18.5% 29.5% 1,533,868 1,533,868 575,869 1,497,181 $12.30 North 115 8,521,694 6.8% 0.2% 596,571 7.0% 5.6% (116,989) (116,989) 0 0 $15.11 Northeast 58 4,507,220 6.7% 0.2% 309,536 6.9% 5.6% (56,087) (56,087) 0 329,627 $16.00 Northwest 12 1,235,633 3.9% 0.0% 47,708 3.9% 3.2% (8,626) (8,626) 0 0 N/A Round Rock 49 3,993,188 28.2% 0.0% 1,124,627 28.2% 26.7% 211,449 211,449 366,115 369,963 $17.36 South 15 764,451 11.2% 0.0% 85,359 11.2% 11.2% 173 173 0 0 $18.56 Southeast 128 10,649,109 4.3% 0.5% 513,393 4.8% 5.8% 102,075 102,075 0 2,907,501 $15.11 Southwest 1 62,005 0.0% 0.0% 0 0.0% 0.0% 0 0 0 0 N/A West Central 0 0 0.0% 0.0% 0 0.0% 0.0% 0 0 0 0 N/A Bastrop 6 509,935 0.0% 0.0% 0 0.0% 0.0% 0 0 0 0 N/A Caldwell 6 739,559 54.0% 0.0% 399,432 54.0% 60.6% 48,900 48,900 0 0 N/A Total Market 667 65,083,801 12.9% 0.5% 8,714,709 13.4% 15.8% 3,085,784 3,085,784 1,778,213 8,411,395 $13.63 Industrial Market Summary Flex Cedar Park 16 547,378 0.5% 20.7% 115,684 21.1% 20.7% (2,500) (59,261) 0 35,759 $27.27 Central 20 196,743 0.0% 0.0% 0 0.0% 1.6% 3,200 20,578 0 0 $20.00 East 48 1,541,408 6.2% 0.0% 95,669 6.2% 6.2% 0 (95,669) 0 0 N/A Far Northeast 76 744,464 4.9% 0.0% 36,750 4.9% 4.3% (5,100) 45,375 0 0 $23.31 Far Northwest 13 145,847 34.0% 0.0% 49,610 34.0% 35.1% 1,517 (2,400) 47,210 0 $16.81 Georgetown 92 2,565,179 11.4% 0.0% 292,366 11.4% 5.2% 42,700 467,577 712,974 189,280 $1.56 Hays 92 1,251,688 4.7% 0.0% 59,255 4.7% 4.1% (7,500) (11,000) 0 0 $14.74 North 188 4,858,911 9.5% 1.7% 542,552 11.2% 9.5% (79,046) (153,631) 0 0 $21.76 Northeast 104 4,004,298 3.5% 7.4% 438,550 11.0% 9.8% (45,956) (243,666) 0 0 $18.03 Northwest 26 1,643,158 4.8% 2.0% 110,478 6.7% 2.4% (71,588) (66,188) 0 0 $20.00 Round Rock 65 937,167 0.0% 0.0% 0 0.0% 0.0% 0 133,748 0 0 N/A South 23 738,104 0.2% 0.0% 1,200 0.2% 0.0% (1,200) (1,200) 0 0 N/A Southeast 186 3,982,604 9.8% 2.5% 489,414 12.3% 8.0% 72,416 (7,504) 263,226 0 $11.50 Southwest 6 193,027 0.0% 10.0% 19,342 10.0% 8.1% (3,750) (3,750) 0 0 $28.00 West Central 0 0 0.0% 0.0% 0 0.0% 0.0% 0 0 0 0 $0.00 Bastrop 12 269,831 6.9% 0.0% 18,500 6.9% 6.9% 0 0 0 85,000 $6.00 Caldwell 9 208,857 0.0% 0.0% 0 0.0% 0.0% 0 0 0 0 N/A Total Market 976 23,828,664 6.8% 2.7% 2,258,570 9.5% 7.2% (96,807) 33,809 1,023,410 477,516 $18.69
Colliers | Austin | 24Q1 | Industrial Industrial Austin Q1 Existing Properties Vacancy Net Absorption Construction Submarket Bldgs Total Inventory SF Direct Vacancy Rate Sublease Vacancy Rate Total Vacant SF Vacancy Rate Current Vacancy Rate Prior Qtr Net Abs Current Qtr SF Net Abs YTD SF New Supply YTD SF Under Construction SF All Industrial Cedar Park 9 1,001,316 0.2% 11.3% 115,684 11.6% 11.3% (2,500) (2,500) 0 369,189 Central 5 876,824 9.8% 0.0% 86,000 9.8% 10.3% 3,950 3,950 0 0 East 11 4,161,129 4.6% 0.3% 201,542 4.8% 7.3% 103,181 103,181 0 1,145,417 Far Northeast 12 11,604,985 6.4% 1.0% 858,140 7.4% 8.0% 71,097 71,097 0 1,267,949 Far Northwest 4 539,656 11.5% 0.0% 62,110 11.5% 11.3% (983) (983) 0 0 Georgetown 22 11,379,887 26.3% 0.0% 2,998,524 26.3% 30.8% 1,236,093 1,236,093 1,049,061 749,607 Hays 17 11,529,917 16.1% 1.0% 1,965,417 17.0% 26.6% 1,526,368 1,526,368 575,869 1,497,181 North 73 13,380,605 7.8% 0.7% 1,139,123 8.5% 7.0% (196,035) (196,035) 0 0 Northeast 46 8,511,518 5.2% 3.6% 748,086 8.8% 7.6% (102,043) (102,043) 0 329,627 Northwest 14 2,878,791 4.4% 1.1% 158,186 5.5% 2.7% (80,214) (80,214) 0 0 Round Rock 16 4,930,355 22.8% 0.0% 1,124,627 22.8% 21.3% 211,449 211,449 366,115 369,963 South 8 1,502,555 5.8% 0.0% 86,559 5.8% 5.7% (1,027) (1,027) 0 0 Southeast 58 14,631,713 5.8% 1.1% 1,002,807 6.9% 6.4% 174,491 174,491 263,226 2,907,501 Southwest 5 255,032 0.0% 7.6% 19,342 7.6% 6.1% (3,750) (3,750) 0 0 West Central 0 0 0.0% 0.0% 0 0.0% 0.0% 0 0 0 0 Bastrop 6 779,766 2.4% 0.0% 18,500 2.4% 2.4% 0 0 0 85,000 Caldwell 3 948,416 42.1% 0.0% 399,432 42.1% 47.3% 48,900 48,900 0 0 Total Market 309 88,912,465 11.3% 1.1% 10,973,279 12.3% 13.5% 2,988,977 2,988,977 2,254,271 8,888,911 Industrial Market Summary
At the end of first quarter 2024, building inventory in the Austin Warehouse/Distribution Market consisted of 65,083,801 square feet in 667 properties. Net absorption year-to-date through first quarter 2024 was 3,085,784 square feet. The vacancy rate stood at 13.4%, an increase from the rate of 7.6% reported at this time last year. Quoted rental rates averaged $13.63 NNN per square foot, which is up 29.1% compared to the rate of $10.56 NNN from the same quarter last year. As of end of Q1 2024, 12 properties were delivered year-to-date, totaling 1,778,213 square feet, and 8,411,395 square feet in 66 properties were under construction. 667
3.1 MSF
Colliers | Austin | 24Q1 | Industrial Industrial Austin Q1 Warehouse / Distribution Market
12
8.4 MSF
66 Bldgs 65.8 MSF $13.63 13.4%
MSF | 26 Bldgs
|
# of buildings new supply under construction overall market size asking rate PSF (NNN) vacancy rate net absorption YTD Vacancy
New Supply, Net Absorption
Vacancy Trend 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 0 2,000 4,000 6,000 8,000 10,000 12,000 0.0% 5.0% 10.0% 15.0% 20.0% (000s SF) Vacancy Rate Net
New
2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 0 2,000 4,000 6,000 8,000 10,000 12,000 0.0% 5.0% 10.0% 15.0% 20.0% (000s SF) Vacancy Rate Net Absorption New Supply Vacancy Rate
and Rental Rate Trend
and
Absorption
Supply Vacancy Rate
At the end of first quarter 2024, building inventory in the Austin Flex Market consisted of 23,828,664 square feet in 309 properties. Net absorption year-to-date through first quarter 2024 was negative 96,807 square feet. The vacancy rate stood at 9.5%, an increase from the rate of 5.6% reported at this time last year. Quoted rental rates averaged $18.69 NNN per square foot, which is up 6.3% compared to the rate of $17.59 NNN from the same quarter last year. As of end of Q1 2024, 4 properties were delivered year-to-date, totaling 476,058 square feet, and 477,516 square feet in 8 properties were under construction.
SF | 4 Bldgs
477.5k SF | 8 Bldgs
Colliers | Austin | 24Q1 | Industrial Industrial Austin Q1 Flex
309
23.8 MSF $18.69 9.5% -
# of buildings new supply under construction overall market size asking rate PSF (NNN) vacancy rate net absorption YTD Vacancy and Rental Rate Trend New Supply, Net Absorption and Vacancy Trend $0 $5 $10 $15 $20 0% 2% 4% 6% 8% 10% 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 Asking Rental Rate PSF (Gross) Vacancy Rate Rental Rate Vacancy Rate 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 -200 0 200 400 600 800 1,000 0% 2% 4% 6% 8% 10% (000s SF) Vacancy Rate Net Absorption New Supply Vacancy Rate
476k
96k SF
Colliers | Austin | 24Q1 | Industrial Industrial Austin Q1 Austin Industrial Market Submarket Bldgs # RBA (SF) Vacancy Rate Absorption (YTD) New Supply (YTD) Under Construction 1. Bastrop 12 779,766 2.4% 0 0 85,000 2. Caldwell 9 948,416 42.1% 48,900 0 0 3. Cedar Park 16 1,001,316 11.6% (2,500) 0 369,189 4. Central 20 876,824 9.8% 3,950 0 0 5. East 48 4,161,129 4.8% 103,181 0 1,145,417 6. Far Northeast 76 11,604,985 7.4% 71,097 0 1,267,949 7. Far Northwest 13 539,656 11.5% (983) 0 0 8. Georgetown 92 11,379,887 26.3% 1,236,093 1,049,061 749,607 9. Hays County 92 11,529,917 17.0% 1,526,368 575,869 1,497,181 10. North 188 13,380,605 8.5% (196,035) 0 0 11. Northeast 104 8,511,518 8.8% (102,043) 0 329,627 12. Northwest 26 2,878,791 5.5% (80,214) 0 0 13. Round Rock 65 4,930,355 22.8% 211,449 366,115 369,963 14. South 23 1,502,555 5.8% (1,027) 0 0 15. Southeast 186 14,631,713 6.9% 174,491 263,226 2,907,501 16. Southwest 6 255,032 7.6% (3,750) 0 0 17. West Central 0 0 0.0% 0 0 0 Total Market 976 88,912,465 12.3% 2,988,977 2,254,271 8,888,911 FAR NORTHEAST ROUND ROCK GEORGETOWN FAR NORTHWEST CEDAR PARK NORTH/ DOMAIN NORTHEAST NORTHWEST SOUTHWEST SEGUIN SCHERTZ EAST SOUTH SOUTHEAST CENTRAL WEST CENTRAL HAYS COUNTY BASTROP COUNTY CALDWELL COUNTY 95 130 29 71 360 1 195 71 95 29 95 71 21 21 71 1 45 130 130 80 46 304 1296 2 9 15 14 17 4 5 11 6 13 10 12 7 16 3 8 77
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