Austin industrial market report

Q4 2023

The Austin industrial market remained strong throughout 2023, driven by sustained positive absorption, which has exceeded the 10-year pre-pandemic average even after the record-breaking highs of the previous two years. While vacancy rates have seen a steady rise, this is primarily due to the influx of new construction deliveries outpacing demand. However, the strong occupancy gains in the northern end of Austin have effectively offset the impact of these elevated vacancy rates, balancing the delivery of new product. This resilience is further fueled by booming development activity, with 16.2 million sf of new product under construction. Fueled by a surging population and influx of new businesses, Austin’s industrial property sector is poised to weather any market fluctuations and continue its impressive growth trajectory. 
3.2 msf

Georgetown and Far Northeast Austin stand out as the top submarkets

Georgetown and Far Northeast emerged as the most active submarkets in terms of occupancy gains and construction completions in 2023. Both submarkets ended the year with 3.2 million sf of absorption combined largely driven by significant move-ins within new developments.   

4.4 msf

Distribution and manufacturing lead in product type

Distribution and manufacturing space remained the top performing property subtypes for absorption in 2023. Large-scale tenants, such as Factory Builders and US Farathane, occupied 430,668 sf. As a result of the strong quarterly gains, total net absorption ended the year at 4.4 million sf for both subtypes combined. 

+1.6 msf

Positive absorption gains in Austin Industrial

Austin’s industrial sector continues to show strength with a noteworthy quarterly absorption gain of almost 1.6 million sf, pushing the year-end total to 4.8 million sf. The completion of the SpaceX Project made a significant contribution, adding 521,000 sf. With sustained positive absorption, Austin’s industrial market is anticipated to keep pace with the wave of new supply coming online. 

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