Austin Commercial Real Estate Market Update Mid Year 2014

The second quarter of 2014 netted 331,000 square feet (SF) of positive net absorption.  Year to date absorption totals 529,192 SF.  Second quarter lease activity totaled 1,285,825 SF of signed leases which equates to 260 lease transactions for the second quarter, a 5% increase over the Quarter 1 activity.  476,000 SF of lease space was signed in the CBD with 598,000 SF signed in the Northwest / Far Northwest sub-markets respectively.  The average asking rate for rent is $20.11 net /SF/Year or $29 gross /SF./Year.  Occupancy is up .9% over the previous quarter and 1.4% up over the previous 12 month period.   Approximately 424,000 SF of new office space has been delivered to the market in 2014, with over 2.8 million of new construction underway.  Pre-leasing for new construction has been strong at 36%.
Transwestern Second Quarter 2014 Austin Office Market Outlook

Quarter 2, 2014 was the second consecutive quarter of net negative absorption in the Austin industrial market.  2009 was the last time the first two quarters of the year started with negative absorption.  Absorption totaled -109,469 SF for Quarter 2 and the Year to Date total negative absorption reached – 293,813 SF.  Flex space and warehouse space totaled 13.4% and 10.4% respectively in terms of vacancy rates.  Dell in the Northeast sub-market and Tharco in the Hays County sub-market accounted for 300,000 SF and 194,000 SF respectively of lease space returned to the market.  Positive absorption in the Far Northeast sub-market totaled 100,000 SF.  Industrial citywide average asking rates increased by $.04/SF quarter over quarter, the largest increase for citywide asking rates since rate tracking began.  Flex rates totaled $.87/SF/month up from $.79/SF/month which is the highest rate ever recorded.  Warehouse rates decreased by $.01/SF/month.  3.9 million SF of active industrial tenants are in the market place as of quarter 2, 2014 – maintaining a strong demand for new industrial space despite the negative absorption.
2Q 2014 CBRE Austin Industrial MarketView

Weitzman Cencor’s mid-year 2014 market report shows overall occupancy at 95.6 % an increase of 1% and the highest occupancy rate in a decade.  The high occupancy number has led to a shortage of end cap locations and pad sites in Class A locations.  Most new construction in the market is for neighborhood strip centers in the 10,000 SF range with 30 such projects underway or set to open in 2014.  Retailers continue to lease up large format vacancies in the market including tenants such as Trader Joe’s, The Tile Shop, DD’s Discounts (Ross Dress for Less concept), Salons by JC (San Antonio based) and  Southwest Theaters (a discount movie chain).

2014 Weitzman Cencor Mid Year Retail Texas Snapshot
Q2 2014 AUSTIN RESIDENTIAL– Mid-Year Statistics

  • 13,426 – Single-family homes sold, three percent more than the first half of 2013.
  • $239,900 – Median price for single-family homes, seven percent more than the first half of 2013.
  • $308,298Average price for single-family homes, six percent more than the first half of 2013.
  • 47 – Average number of days single-family homes spent on the market, seven days fewer than the first half of 2013.
  • 19,276 – New single-family home listings on the market, one percent more than the first half of 2013.
  • 5,327 – Active single-family home listings on the market, two percent fewer than the first half of 2013.
  • 15,263 – Pending sales for single-family homes, three percent fewer than the first half of 2013.
  • $4,139,209,987 – Total dollar volume of single-family properties sold, eight percent more than the first half of 2013.

Austin Board of Realtors Mid Year Results 2014

Austin multifamily occupancy rates ended the second quarter at 92.6% up .9% from the first quarter but down 1.9% compared to Q2 2013.  Average rent totals $1,052 / month compared to $1,031 / month in Q1 2014 and up from $979/month year over year.
ALN Midyear Multifamily Report Card Texas

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