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Vacancy shrinks to 6.7%. Nearing the end of the second quarter, the vacancy rate dropped 30 basis points to 6.7%, compared to this time last month at 7.0%. Occupancy of the 913,384 sq. ft. delivered to the market year-to-date stands at 41%, and of the 38 properties with 2.3 million sq. ft. currently under construction, 85% of that space is available for lease. Year-to-date net absorption totals about 950,000 sq. ft., while there have been 226 deals accounting for 1.8 million sq. ft. of leasing activity. The average cost of renting industrial space is $10.27 per sq. ft. on a triple net basis. More tech users looking for flex office space have driven rental rates up over the past several years to all-time highs.
Investment sales ahead of the curve 2018. According to Real Capital Analytics, investment sales of industrial properties in the Austin area totaled $358.8 million, a 114% increase from one year ago. Private capital has been the most active buyer type for 2018, comprising 75% of Austin’s total sales volume, followed by cross-border buyers at 17% and institutional investors of the remaining 7%.
Economic activity held steady in April. The local labor force expanded at a strong 4.7% annualized pace year to date, while Austin’s unemployment rate remained at a low 3.0% for a third consecutive month in April. This is well below the state and U.S. jobless figures at 4.1 and 3.9%, respectively.
Director of Research
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