Austin Business Journal – by Ron Losefsky Contributing Writer
It might surprise you to learn that in Central Texas, industrial tenants include a wide range of users such as medical clinics, charter schools, nonprofits and semiconductor equipment vendors — reflecting the economic activity we see about us each day. Many of these companies occupy space not unlike your typical office — professionally finished out and 100 percent climate controlled, with little or no “industrial” space.
Despite this diversified base of tenants, vacancy rates for industrial property across Central Texas have more than doubled recently, reaching almost 20 percent in some submarkets.
In the near term, the diversified tenant base and relative health of the Central Texas economy should keep the bottom from falling out of our industrial real estate market. Landlords of new properties will continue struggling to fill empty buildings, while owners of nearly full older properties should find lower rates and staggered leases stablizing income streams. Those tenants with strong cash flows will find themselves dining on a buffet of lease options while being courted aggressively by their current landlords — an excellent time to capitalize on today’s very attractive rates.
Austin Business Journal – by Kate Harrington ABJ Staff
It comes as little surprise to Austin real estate experts that industrial vacancy has risen during the first six months of the year. But with it, there’s been a surge in activity as some tenants venture out to take advantage of market conditions.
According to research from NAI Austin, lease rates have dropped about 30 percent for warehouse and 10 percent to 15 percent for flex, while incentives range from free rent to increased tenant finish allowance and bonuses for brokers.
NAI reports that the Austin area’s industrial real estate vacancy reached 22 percent, up from 18 percent at the end of 2008. That climb in vacancy came partly from the addition of about 700,000 square feet of newly constructed space and more than 550,000 square feet of Dell Inc.-related space that came back onto the market. Also, 2008 finished as a record year for new construction with 2.4 million square feet of inventory added to the market.