Austin Industrial Quarterly Market Report

Austin Industrial Q4

Key Takeaways

• Net Absorption: A quarterly addition of 1.3 million square feet raises the yearto-date total above 5.8 million square feet, marking the second-strongest year in history.

• Overall Vacancy: Unlike the decline in overall vacancy in the previous quarter, the vacancy rate rose to 15.3% from $14.1% this quarter.

• Under Construction: For the 10th consecutive quarter, the market maintained construction activity exceeding 10 million square feet.

• Asking Rents: Q4 2024 closed the year with an asking rate of $13.16/SF, down from the $14.16/SF peak in Q1 but slightly higher than last quarter’s rate.

Austin’s industrial real estate market ended Q4 2024 on a high note, with total inventory expanding to an impressive 96.5 million square feet. Developers delivered 2.9 million square feet of new space this quarter and continued to actively build an additional 10.8 million square feet. Net absorption for the quarter reached 1.3 million square feet, bringing the annual total to over 5.8 million square feet—a strong performance for any market, especially amid Austin’s dynamic growth. Since 2021, a remarkable 33.7 million square feet of space has been added to the market, reflecting an extraordinary period of expansion. While this wave of new supply may take time to fully absorb, it sets the stage for Austin’s industrial market to thrive in the years ahead. Tenants are already benefiting from the abundance of available space, competitive asking rates, and an environment rich with opportunity. Asking rents have seen modest increases, but they remain accessible, further cementing Austin as an attractive market for businesses seeking industrial space.

Adding to the market’s positive outlook, construction activity has begun to slow, signaling a natural stabilization as developers align with long-term demand trends. This adjustment positions Austin’s industrial sector for a more balanced and sustainable growth trajectory. With a strong foundation of demand and a thriving local economy, the market is wellpoised to maintain its appeal for both new and existing tenants, fostering continued innovation and investment in one of the country’s most dynamic industrial hubs.

Market Indicators

Market Trends

Austin’s industrial market has achieved positive absorption every year since 2009, absorbing 39,576,482 square feet while delivering 46,291,911 square feet of new space.

At the end of fourth quarter 2024, building inventory in the Austin Warehouse/Distribution Market consisted of 72,609,206 square feet in 723 properties. Net absorption year-to-date through fourth quarter 2024 was 5,480,342 square feet. The vacancy rate stood at 17.5%, an increase from the rate of 15.3% reported at this time last year. Quoted rental rates averaged $11.85 NNN per square foot, which is down 7.9% compared to the rate of $12.87 NNN from the same quarter last year. As of end of Q4 2024, 61 properties were delivered year-to-date, totaling 8,355,299 square feet, and 9,065,863 square feet in 55 properties were under construction.

At the end of fourth quarter 2024, building inventory in the Austin Flex Market consisted of 16,348,623 square feet in 240 properties. Net absorption year-to-date through fourth quarter 2024 was negative 636,348 square feet. The vacancy rate stood at 12.2%, an increase from the rate of 7.0% reported at this time last year. Quoted rental rates averaged $22.05 NNN per square foot, which is up 4.4% compared to the rate of $21.12 NNN from the same quarter last year. As of end of Q4 2024, 5 properties were delivered year-to-date, totaling 220,568 square feet, and 312,685 square feet in 6 properties were under construction.