Austin’s industrial market remains strong after experiencing record-breaking growth in 2022. According to CBRE’s latest market update, the city saw over one million square feet of positive net absorption during the first quarter of 2023, on par with the performance in Q1 of 2022. Throughout the first three months of the year, developers added 1.7 million square feet of new product to the market, mainly concentrated in industrial submarkets on the northern and southern ends of Austin.
A significant factor contributing to this demand is the continued rise of consumer goods, e-commerce, and manufacturing activities, particularly linked to the opening of Tesla’s ten million-square-foot gigafactory. Industrial asking rents did see a slight decrease of 3% from the fourth quarter of 2022, settling at an average of $11.21 triple net. However, CBRE’s report points out that the vacancy and availability rate also decreased due to the inclusion of owner-occupied properties in the data and strong leasing activities.
Local developers are responding to this growing demand by planning the delivery of 16 million square feet of industrial spaces by the end of the year as a result of supply chain realignment that has driven the demand across the country. For more information about Austin’s industrial market and the current trends in Central Texas, read the full report [here](https://www.recenter.tamu.edu/news/newstalk-texas/?Item=29115).