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Q2 2021 Austin Industrial Report

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If you were a tenant seeking more than 100,000 SF of industrial space this quarter, we feel for you.

Key Takeaways

  • Supply constraints across all size ranges are forcing many tenants to consider shell space or pre-leasing in planned and under construction projects
  • Third-party suppliers for Tesla’s Gigafactory have commenced executing leases – more anticipated in the second half of 2021
  • Escalating rents and marginal concessions will likely trend through the year until projects currently under-construction deliver in early 2022

The Boots On The Ground

Our “Boots on the Ground” viewpoint is the voice of our experts, who have broken down the market data and compared it to what they are seeing for themselves. This is their take on what the numbers actually mean for the Austin industrial market.

If you were a tenant seeking more than 100,000 SF of industrial space this quarter, we feel for you. Austin’s industrial market continued its trend of tight supply throughout Q2, driving many tenant requirements into a dwindling supply of shell space while the market awaits new deliveries later this year and into early next. Case in point: Any tenant requirement over 100,000 SF that couldn’t work in a dated metal building was forced to look at shell space, much of which hasn’t yet delivered. There were no 2nd generation tilt-wall options over 100,000 SF across the market. 

The Market at a Glance

With the market constrained for space across size ranges, Austin continued the novel trend of pre-leasing with much of the activity taking place in the Southeast and Hays County submarkets. Notably, in June, NorthPoint Development officially delivered the Plum Creek Industrial Center 92% pre-leased. Between deals struck in Phase I (444,058 SF) and one of the largest lease deals ever signed in the Austin area totaling 491,651 SF in Building III, the Plum Creek Industrial Center is left with only 73,528 SF of vacant space out of the 935,709 SF planned in the park. Elsewhere, spec industrial projects have seen similarly robust pre-leasing activity, including Phase II at Park 183 in the Southeast submarket which is nearly 80% pre-leased across its two buildings totaling 317,572 SF under construction.

Since Tesla’s announcement of their new manufacturing facility in East Austin, all eyes have been on the cadre of third-party suppliers and ancillary manufacturers that were competing for lucrative contracts with the company. The second quarter brought the first of these leases, with more planned in the coming months.

Future Forecast

The strong demand in the area has everyone’s sights set on the development pipeline which, while extensive, won’t provide significant relief on vacancy until at least Q4 2021 and into Q1 2022. Planned projects and those currently under construction promise to deliver an additional 5 million square feet of space by the first part of 2022, which we anticipate will temper rate growth and stimulate more competition amongst developers and landlords for deals.

That said, the market remains constrained in the 2nd quarter of 2021, and with no signs of slowing demand, we anticipate inflated rents and skinny tenant concessions in the near term until the real competition starts.

Absorption, Supply & Demand

Robust demand and lagging supply have squeezed the Austin market, benefiting Landlords with inflated rates and abundant preleasing. This is clearly illustrated by Q2’s absorption of 1,006,935 SF – a 12-month high in an already bustling year. Many construction projects (2,294,071 SF currently under-construction) won’t be shell complete until early 2022, which will continue to drive fierce competition amongst the multitude of tenants seeking space through the second half of 2021.   



Q2 2021 Austin Industrial Report

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Related Experts

Travis Hicks

Senior Vice President


Travis joined Colliers in 2014 as Vice President and specializes in Tenant and Landlord representation services for Industrial users.  Travis has more than fifteen years of commercial real estate experience including more than 400 transactions totaling 4.5M SF.  His comprehensive understanding of the Austin industrial market and his experience navigating complex transactions for both Tenants and Landlords enables him to provide the highest level of service to his clients. 

​Prior to joining Colliers, Travis was a Leasing Director for PS Business Parks, Inc., a national REIT, where he was responsible for executing the marketing and leasing strategy for a portfolio of 900,000 SF consisting of 16 industrial, flex, value office and retail buildings in three Austin submarkets.  He started his commercial real estate career in 2006 with UGL Equis (now DTZ) where he provided tenant representation services for office and industrial clients. 

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Chase Clancy

Vice President


Chase Clancy joined Colliers International as an industrial leasing specialist in 2018.  Utilizing a deep knowledge of the industrial market, Chase prides himself on building relationships and working with integrity to achieve his clients' long-term goals.

Prior to joining Colliers, Chase worked as a commercial agent for Don Quick & Associates, earning invaluable experience as an industrial and office landlord representative.  Chase uses his understanding of both sides of the transaction to help maximize value for his clients.

Originally from the Pacific Northwest, Chase grew up in Tacoma, Washington, and earned his Bachelor of Arts from Seattle University.  In his free time, he enjoys playing guitar, golf, hunting, photography, exploring new restaurants and traveling with his wife, Amy, and two sons, Ace and Gus.

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Lisa Bridges

Director of Market Research


Lisa joined Colliers in 2010 as Director of Market Research and has 37 years of commercial real estate experience. Lisa initiates proactive market research projects to further the business goals of the company. She writes and prepares 29 market reports annually, including quarterly reports on Houston's retail, office, industrial and healthcare properties.  Further, she prepares statistical ownership reports for various clients as well as an annual Houston Economic Overview. Lisa also creates PowerPoint market presentations, trade journal articles, and other marketing materials supporting the company's business endeavors. She works with senior management in planning the company's marketing strategy and public relations support for local and national conferences, luncheon meetings, recruitment programs, and special events.  Lisa works closely with the company's brokers to develop effective custom market research material specific to existing and potential clients.

Lisa serves on the Colliers Editorial Board, the Colliers U.S. Research Council, and is a recipient of the Colliers Researcher of the Year Award.

Lisa earned the Commercial Property Research Certification (CPRC) from Colliers University.  CPRC is the first and only accreditation for commercial real estate research professionals. It offers a professional development path to increase strategic and tactical expertise in marketing/research, knowledge of the industry and capabilities with commercial real estate tools.

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