Austin warehouse construction growing

With Austin’s industrial market still below 10% for the past year , Austin warehouse construction is starting to see some emphasis. For the most recent quarter, occupancy rates remained the same with still positive occupancy.  New Austin warehouse construction delivered during the 2nd quarter of 2017. Most of the new construction was delivered in the Southeast sub-market. The SE sub-market has always been one of the highest concentrations of industrial product for the Austin area.  Of the 800,000+ SF of warehouse construction, 80% of it was done in the Southeastern part of the warehouse market. Developers are still looking to develop more warehouse properties with an additional 400,000+ SF of product.

Sub-Markets and concentration of inventoryAustin Land Development

The Southeast sub-market is very popular due to its proximity to Interstate 35 , Highway 71 and Austin Bergstrom Airport. The top performing sub-market by popularity for the 2nd quarter of 2017 was Hays County and Round Rock.  Shire Commercial is currently working with a developer to develop in Northeast Austin towards the Hutto sub-market where inventory is not in high supply.  Regarding inventory concentrations, if you are a Buyer and looking for warehouse properties for sale , inventory still remains fairly tight.  Stand-alone warehouses with small footprints and a yard are difficult to locate and requires a buyer to look in secondary markets or small towns typically. Pricing for warehouses will remain higher for the near-future.  Lease rates are fairly static and not moving off their highs for 2017 and we expect this to continue thru the third quarter until more inventory is put onto the market and demand winds down a bit.