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

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REOC Austin releases 2Q 2014 industrial market update

As is typical this time of year, activity in the Austin industrial market slowed in the second quarter.  According to the survey of more than 38 million square feet of industrial lease space conducted by REOC Austin, the local industrial market closed the second quarter with a citywide vacancy rate of 12.1% which is up sharply compared to 10.6% last quarter.

“Three main factors played into the increased vacancy this quarter;” explains Mark Milstead, Vice President, Industrial Services, REOC Austin, “first, historical trends show that activity typically slows in the summer months, second, new inventory was delivered to the market, and third, the biggest impact came from the return of space at Techridge Park where Dell vacated more than 300,000 square feet at 13301 McCallen Pass this quarter following the emptying of nearly 300,000 square feet at 301 Howard last quarter.”  The added vacancy of these two buildings alone accounts for a 1.6 percentage point increase in the citywide vacancy rate.

The negative absorption generated from Dell’s move out of the McCallen Pass building pulled the citywide market into the red with a total of 168,774 square feet of negative absorption for the quarter.  Gains in the first quarter, however, reduced the overall setback bringing the year-to-date total loss to 86,367 square feet.  “Despite the summer slowdown, new supply and recent move-outs, the citywide vacancy rate remains nearly unchanged compared to 12.0% recorded in the same quarter one year ago,” adds Milstead.

For more completion information, download REOC Austin’s 2Q 2014 Industrial Source Report.

Click to read related article:  Austin industrial market slumps but interesting developments abound (Austin Business Journal, 7-14-14)

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