IRR-Austin Mid-Year Viewpoint 2015 Local Market Report - Industrial
The strength of the local economy with high employment, strong population growth, and expanding business continues to drive the industrial property sector into the expansion phase of the market cycle. The overall vacancy decreased in the first part of 2015 and will likely continue this trend into the remainder of the year and even into 2016.
Rental rates are increasing and are expected to continue climbing upward slightly throughout 2015. Overall absorption has been positive over the past four years and demand indicates this will continue even with an estimated 745,000 square feet of new industrial space planned over the next year. Both cap and discount rates saw little variation in the first part of 2015 and will likely remain steady for the near future.
Over the next several years, northeast Austin is expected to experience significant new development in the industrial sector, with more than 2 million square feet of space planned. Current projects in this submarket include several flex space buildings under construction within the Pecan 130 Business Park in Pflugerville and the recently completed 250,000 square-foot FedEx Ground facility. Scottsdale Crossing, a master-planned development in Cedar Park, is set to expand its industrial park by nearly 200,000 square feet and the MetCenter, a 550-acre mixed-use business park in southeast Austin has nearly 3 million square feet of additional space in the planning stages. Also in southeast Austin, Trammell Crow has broken ground on a 240,000 square-foot industrial facility at the Expo Business Park. The expansion of business and continued strength of the local economy should continue to drive the expansion of the Austin industrial market.
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IRR Mid-Year Viewpoint 2015 comprises a National Overview report and 300+ two-page Local Market Reports for all key property types as well as additional resources, including metrics methodology, graphs, and tables; these free reports may be downloaded from IRR’s site here.