Q1 2016 Austin Industrial Market Research & Forecast Report
Austin’s industrial construction pipeline continues to grow
Austin’s industrial market continues to grow despite a slight rise in vacancy and a decrease in positive net absorption over the quarter. Citywide average vacancy rose to 7.7% over the quarter and positive net absorption reached only 13,890 square feet, but industrial space under construction rose again in the first quarter to 1.8M square feet.
Austin’s citywide average rental rates also increased over the quarter from $9.30 per SF NNN to $9.54 per SF NNN. Citywide warehouse/distribution rental rates increased over the quarter to $7.32 per SF NNN and Flex/R&D rental rates increased to $11.32 per SF NNN.
Buildings that delivered in Q1 2016 include Harris Ridge Business Center Building 5, a 153,000 square foot building in the Far Northeast submarket. 1,839,297 square feet of industrial supply was under construction in Q1, including the new 855,000 SF Amazon distribution center and the 500,000 SF Capitol Wright distribution center.
Texas added 2,100 nonfarm jobs in February, expanding the state’s employment for the 11th consecutive month. Austin’s unemployment rate remains the second lowest in the state behind Amarillo. Since Q1 2015, Austin’s unemployment rate has dropped from 3.5% to 3.1%.
Texas has seen an upward trend in the education and health services industry for 37 consecutive months. Seven out of eleven major industries saw growth in the first quarter across the state.
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