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Overall vacancy is at 8.2%, up from this time last year at 6.4%, due in part to the vacant space delivered to the market in 2019—about 70% of the total 2.2 million sq. ft. completed. Of the 1.9 million sq. ft. currently under construction, about 72% of that space is available for lease.
Leasing activity keeps up strong pace. Overall vacancy is at 8.2%, up from this time last year at 6.4%, due in part to the vacant space delivered to the market in 2019—about 70% of the total 2.2 million sq. ft. completed. Of the 1.9 million sq. ft. currently under construction, about 72% of that space is available for lease. The vacancy rate for Class A properties is at 26.6%, up from 16.1% this time last year. The Austin industrial market has recorded 3.7 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 597,000 sq. ft., down significantly from 1.5 million sq. ft. year-over-year. The asking price for industrial properties is currently at a triple-net average monthly rate of $0.88 per sq. ft., up 5.6% from September 2018 at $0.83 per sq. ft.
Red Bluff modern-industrial mixed-use. Construction on the Red Bluff mixed-use development at 4713 E. Cesar Chavez St. will begin in Q1 2020. A metal warehouse for auto repair is currently on the site south of Red Bluff Road—an area known for an abundance of industrial warehouses for as far back as can be remembered. The upcoming Red Bluff development should change the atmosphere in the neighborhood noticeably. East Austin has been referred to as more desirable than downtown with more affordable rents and more available parking with hopes of attracting more office and retail tenants to the area.
Solid economic performance in July. Austin’s unemployment rate ticked up to 2.7% in July compared to the national rate at 3.7%, and the state registering at 3.4%. This year through July the metro’s labor force expanded 0.9% annualized, much slower than the 3.6% in 2017 and 2.7% in 2018—signifying an increasingly tight labor market in Austin. In the three months ending in July, information jobs—software publishers, newspaper publication, motion picture and video industries—slowed to a still-high 17.0% annualized, or a net 1,500 jobs. Payrolls within the trade, transportation and utilities industries posted healthy growth during this period at 8.7%, followed by manufacturing at 8.2%.
Director of Research
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