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Overall vacancy is at 8.5%, up from this time last year at 7.2% due in part to the vacant space delivered to the market in 2019—about 50% of the total 2.8 million sq. ft. completed.


Market Highlights

Supply outpacing demand. Overall vacancy is at 8.5%, up from this time last year at 7.2%, due in part to the vacant space delivered to the market in 2019—about 50% of the total 2.8 million sq. ft. completed. Of the 1.8 million sq. ft. currently under construction, about 81% of that space is available for lease. The vacancy rate for Class A properties is at 28.4%, up from 21.7% this time last year. The Austin industrial market has recorded 1.6 million sq. ft. of leasing activity—which is comprised of both new leases and renewals—while net absorption (move-ins minus move-outs) year-to-date is at negative 140,000 sq. ft., up slightly year-over-year.

 

Slowing the spread of COVID-19. Manufacturing facilities, warehouses, and construction sites can remain open but must have fewer than 10 people in a “single space,” in an effort by Austin officials to contain the COVID-19 pandemic. Many statewide construction associations have been working to ensure that construction will be considered an essential business and exempted from any potential “shelter in place” order in Texas. Boston has suspended construction development in city limits, although widespread shutdowns across the country have not been seen yet.

 

Jobless rate up in January. The 2.7% jobless rate for the Austin area in January is up from 2.4% in December, although it is the lowest rate for the month of January in 21 years. The local economy is moving into a time of uncertainty as coronavirus related concerns disrupt the day-to-day routine, fortunately, Austin is at a strong position in the job market. Job growth over the 12 months ending in January has been led by 7,700 new jobs in professional and business services, that includes most of the technology sector. Jobs in that category have risen 4% since January 2019, according to the Texas Workforce Commission.

Leta Wauson
Director of Research
[email protected]
tel 713 275 9618

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