Q3 2015 Austin Industrial Market Research & Forecast Report
Austin’s industrial rental rates reach all time highs
Austin’s industrial market continues to progress as rental rates rise yet again in the third quarter. The citywide average quoted rental rate increased by 4.2% between quarters from $8.59 to $8.95 per SF NNN, and increased 19.8% on a year over year basis from $7.47 per SF NNN.
Vacancy dropped 70 basis points over the quarter from 9.2% to 8.5%, and has dropped 270 basis points on a year over year basis. The current overall vacancy rate of 8.5% is the lowest ever recorded.
Three buildings totaling 399,205 SF delivered in the third quarter, all of which were in the Southeast submarket, including Expo Center 10 & 11. Although positive net absorption decreased over the quarter for a total of 695,013 SF, this is still the second highest positive net absorption ever recorded.
According to the Texas Workforce Commission, Texas’ unemployment rate of 4.4% is among the lowest that the state has ever seen. In the state’s capital city, unemployment was at a mere 2.8% at the end of the third quarter 2015, 100 basis points lower than it was last year.
Austin is ranked No. 1 for real estate development across all 75 markets surveyed in Emerging Trends in Real Estate, an annual report published by the Urban Land Institute and PwC LLP. Austin ranked second in the nation for overall real estate prospects.
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