Austin Industrial Construction Pipeline Tops Previous Highs

Austin’s industrial construction pipeline surged to a new record-high of 16.9 million square feet.—a 74% increase from Q1 2022. Partners Real Estate reports most of the pipeline consisted of 16 million square feet in Warehouse/Distribution space and rounded out by 500,000 sq. ft. of Manufacturing space.

Net absorption—(move-ins minus move-outs)—is at 848,352 sq. ft. in Q2 2023. This marks the 16th straight quarter of positive net absorption for the Austin Industrial market, dating back to Q2 2019.

The average monthly rental rate for Austin’s Industrial market stands at $1.08 per sq. ft. as of Q2 2023, down quarter-over-quarter from $1.10 per sq. ft. in Q1 2023.

By the end of Q2 2023, the overall vacancy rate in the Austin Industrial market is at 7.5%, up 160 basis points from the previous quarter’s 5.9%.

The volume of signed lease transactions during the second quarter was up 57% from the previous quarter’s 1.3 million sq. ft.