Austin Industrial demand at record-breaking levels.
DEMAND SURPASSES SUPPLY Demand for industrial space (9.1 million sq. ft.) outpaced supply (6.6 million sq. ft.) through October of 2021 in the Austin metro. This is the highest level of demand ever recorded for January through October. With 6.6 million sq. ft. delivered since the beginning of the year, 11.6 million sq. ft. under construction, and another 6.3 million sq. ft. planned through 2022, future growth in population and consumer demand could attract additional ecommerce distributors to set up larger facilities in Austin. According to commercial real estate association NAIOP’s most recent Industrial Space Demand Forecast, the nationwide push toward industrial development is likely to continue through 2022—including Austin.
DEVELOPERS ARE ENCOURAGED With 57 properties comprising 11.6 million sq. ft. in the construction pipeline, developers are confident by the Samsung expansion, Tesla’s growth, and Amazon’s recent leasing spree. The Tesla Gigafactory project makes up 4.5 million sq. ft. of development, and of the remaining 7.1 million sq. ft. underway, about 37% of the space is available.
LEASING REMAINS AT ALL-TIME HIGH The volume of signed lease transactions year-to-date through October hit an all-time record at 9.2 million sq. ft.—up from the prior period at 7.2 million sq. ft. Austin industrial leasing volume was up close to 30% through the ten-month period of 2021 compared with the same period last year. In total, 35 new building lease transactions of more than 50,000 sq. ft. were signed over the ten-month period. Some of the largest leases in 2021 include: Amazon for 767,000 sq. ft. at 1346 Fortuna Road (delivers December 2021) in Hays County in January; Simwon for 491,651 sq. ft. at Plum Creek Industrial Center (delivers January 2022) in Hays County in April; and DXC Technology for 185,757 sq. ft. at 14500 Single Trace in the North submarket in April.
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