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Overall vacancy is at 8.5%, up from this time last year at 7.7%, due in part to the vacant space delivered to the market so far in 2020—about 85% of the total 1.2 million sq. ft. completed.
Vacancy at 8.5%. Overall vacancy is at 8.5%, up from this time last year at 7.7%, due in part to the vacant space delivered to the market so far in 2020—about 85% of the total 1.2 million sq. ft. completed. Of the 1.6 million sq. ft. currently under construction, about 77% of that space is available for lease. The vacancy rate for Class A properties is at 25.5%, up from the prior period at 24.1%. The Austin industrial market has recorded 2.4 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 207,000 sq. ft., up from 79,000 sq. ft. year-over-year.
Amazon leases warehouse in Buda. The coronavirus pandemic has further underscored the need for e-commerce industrial space. Demand has been growing for Amazon and its rivals as online purchases have intensified during the stay-at-home orders. Amazon is preparing to open a new industrial facility in Buda, Texas, this year, bringing hundreds of jobs to the small city 16 miles south of downtown Austin. The surge in online ordering could permanently change consumer behaviors, allowing this type of industrial product to withstand the impending recession better than many other commercial real estate property types.
Austin economic indicators. The Federal Reserve Bank of Dallas reported that the Austin economy slowed in March as the impacts of the coronavirus (COVID-19) began to surface. The Austin Business- Cycle Index grew well below trend. Jobs declined, the unemployment rate increased and initial unemployment claims surged. Real estate activity in the metro slowed, home sales prices increased and building permits fell.
Director of Research
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