Leigh Ellis, Aquila Commercial industrial specialist, recently provided insights into the state of the Austin industrial market. He says one word summarizes the industrial market during last quarter.

“If there was one buzzword to describe the Austin industrial market in 4Q 2020, it would be Tesla,” Ellis notes.

Indeed, unless one has been living under a rock, it is well-known that the electric car manufacturer selected Austin for the 2,200-acre site of its new Gigafactory. The building where the Cybertruck and Model Y Tesla vehicles will be built is currently under construction along SH-130.

While the scale of the facility and its effects on the Austin industrial market are yet to be fully understood, there has been a flurry of activity related to the announcement from tenants, developers and investors alike, says Ellis. This has prompted a land grab from local, regional and national investors as well as speculative industrial developers. Much of the focus has been on the SH-130 corridor in close proximity to the Tesla site; however, there are several notable industrial developments slated in Williamson County (Georgetown) and Hays County (Kyle and Buda).

These submarkets offer a pricing discount compared to more centrally located sites. These locations also remain attractive due to the proximity to Austin and more business-friendly environments. Tenant activity has been impacted as well, with dozens of Tesla suppliers and affiliated companies entering the market to search for large blocks of industrial space, says Ellis.