Warehouse update TexasAustin Warehouse Market Wrap up Q4 2017

Let’s wrap up  with the following Austin warehouse market ending Q4 2017, which can be summed up in a short statement “low supply and higher demands”. For the 2017 year, overall the warehouse market in Austin stayed for the most part under 10% vacancy rates.  Higher demand pushed lease rates up higher and asking sales prices of properties. Although demand stayed strong, lease rates did decline a bit at the end of the year by approx $0.25 cents per square foot per year.  Net absorption did not hit 1M square feet for the first time in 4 years.  So, we do see some slowing however it is slight and we do predict for the 1st quarter of 2018 that the Austin warehouse market will be fairly static. Small Warehouse properties starting at 3,500 SF are still very tough to locate depending on the relative sub-market.

Vacancy Rate Comparisons

As far as vacancy rate comparisons, we can look at the following numbers back from 2010 to present.

  • 2010 20.5%
  • 2011 17.2%
  • 2012 13.3 %
  • 2013 9.8%
  • 2014 10.6 %
  • 2015 10.5 %
  • 2016 7.3%
  • 2017 9.9%

So as we can see with the vacancy rates, the Austin warehouse market has not changed substantially since 2013 with our lowest vacancy rates coming in 2016.