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Kim Gatley
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enior Vice President & Director of Research at REOC Austin

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NAI REOC Austin releases 4Q 2012 industrial market update

Although activity slowed somewhat in the final quarter of 2012, the Austin industrial market closed the year on a high note.  For the first time in more than a decade, the total annual amount of industrial space absorbed topped two million square feet.   New leases and expansions generated 117,665 square feet of positive net absorption in the fourth quarter which raised the year-end total to 2,050,382 square feet including roughly 1.7 million square feet of long-term commitments as well as 345,000 square feet of short-term leases primarily attributed to Triple Play Logistics.  

Despite the strong demand, lingering economic concerns and a challenging lending environment have restrained speculative development over the past year which has kept activity funneled to fill existing product.  One new flex project, however, was delivered to the market in the fourth quarter.  MetCenter II, Bldg 4 (172,800 sf) came online to expand the successful Southeast industrial park.  With no pre-leasing reported, the new supply offset positive absorption resulting in a slight increase in the overall vacancy rate over the quarter.  The local industrial market closed the year with a citywide vacancy rate of 12.9% compared to 12.6% last quarter but significantly improved compared to 17.8% recorded at the end of 2011.

Click to download the REOC Austin 4Q Industrial Source Report; click to read related article Austin industrial properties record strong vacancy, absorption numbers (Austin Business Journal, Breaking Ground, 1-14-13).

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