Austin’s industrial market closes 2018 with new buildings and high absorption
Austin’s industrial market posted 539,820 square feet of positive net absorption in the fourth quarter of 2018, bringing 2018’s annual absorption to 1,222,219 square feet. Activity levels remained high
as a large number of sizeable tenants occupied significant blocks of space over the quarter, including Tri-Supply, a home products company, moving into 78,238 square feet at 5811 Trade Center Drive in the Southeast submarket.
Looking forward, ten blocks of space over 10,000 SF will be occupied by new tenants in the first quarter of 2019. One of these tenants is Moore Supply Company, who is taking approximately 75,600 square feet at 10519 Boyer Boulevard in the North submarket.
Austin’s citywide average rental rates increased significantly over the quarter, moving up from $10.57 per square foot in Q3 to $10.98 per square foot in Q4. The average citywide Flex/R&D rental rates increased to $13.56 per square foot up from $13.55 and the average Warehouse/Distribution rental rate also rose slightly to $8.68 per square foot from $8.63 per square foot..
In the fourth quarter, Austin’s industrial market had eleven buildings deliver, and fourteen new buildings began construction. Two of the new buildings under construction are part of the Settlers Crossing Phase II. Buildings 3 and 4, totalling 175,850 square feet, are located at 900 East Old Settlers Boulevard in the Round Rock submarket.
In all, 1,651,290 square feet of industrial supply was under construction, consisting of twenty-two projects. Two build-to-suit projects at 1481 Robert S Light Boulevard, totalling 20,000 square feet, are a part of the 199,884 square feet of construction that was pre-leased in Q4. The inventory set to deliver in the first quarter of2019 includes sixteen buildings totalling 1,353,866 square feet.