Manufacturing’s semiconductor sector is one of the fastest-growing sectors in Texas.
Growing market demand
Eight months into 2022, there has been 8 million sq. ft. of net absorption—including the completion of the Tesla Gigafactory at 4.5 million sq. ft. and Amazon Sat6 at 767,000 sq. ft. for a combined 5.3 million sq. ft.—to the Austin industrial market. In addition, 5.5 million sq. ft. of leasing activity comprised of new leases and renewals took place during the same period. 105 properties 10,000 sq. ft and larger are under construction, tallying 13.8 million sq. ft. with a 60% availability rate. 21.7 million sq. ft. has been added to the Austin Industrial market in the past five years, a 24% increase in total inventory, registering at 112 million sq. ft. as of August 2022.
Vacancy at 4.2%
As of August 2022, overall vacancy in the Austin industrial market is at a tight 4.2%, dropping 40 basis points from last year at 4.6%. Availability is at 10.6%, up from August 2021 at 6.3%. The difference between this figure and the vacancy rate reflects expected future move-outs. As a result of the low vacancy rate, landlords have pushed the NNN average asking monthly rents up 10.2% to $1.07 per sq. ft.—a significant amount from last year’s $0.97 per sq. ft. Austin’s economy has recovered at one of the fastest rates nationally, and more companies and people continue to move to Texas’ capital city.
Supplier for Apple expanding its warehouse
Flextronics America, a major supplier for Apple with a manufacturing campus in Northwest Austin, could be expanding its warehouse space at 12455 Research Blvd. in the Research Park campus. The company has made Apple’s Mac Pro products at the facility since 2013. According to a site application filed with the city of Austin, the maximum amount of land that can be developed is 616,374 sq. ft. on 14.15 acres. Research Park is a 190-acre master-planned office and technology park with 2.25 million sq. ft. of development potential.
Director of Research
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