AUSTIN – Following a record-breaking 2022, demand for industrial product continued to drive local market fundamentals in first quarter 2023, reports CBRE in its latest market update.
CBRE tracked over one million sf of positive net absorption in the first three months of the year, roughly keeping pace with positive net absorption during first quarter 2022.
Developers added 1.7 million sf of new product to the market in 1Q2023. Concessions remained minimal as occupiers head to industrial submarkets on the northern and southern ends of the city.
Consumer goods, ecommerce, and manufacturing related to the opening of Tesla’s ten million-sf gigafactory continue to drive demand.
Other highlights from the report:
- Industrial asking rents were down 3 percent from 4Q2022 to a market average of $11.21 triple net.
- As of 1Q2023, owner-occupied properties are now included in CBRE’s tracked
inventory for Austin industrial to better reflect the entire market. This, coupled with strong leasing activity, caused the vacancy and availability rate to
decrease quarter over quarter. - Local developers have responded to supply chain realignment that has driven industrial
demand across the country with 16 million sf slated for delivery by year-end.