Q3 2011 Austin Industrial Tenant Outlook

Slow to recover but steadily improving, the Industrial vacancy rate in Austin decreased to 12.2% for the 3^rd quarter, down from 13.0% at the end of the second quarter. This decrease in vacancy was triggered by a few expansions of existing companies and a couple of large acquisitions.  Far Northeast, North and Southeast continue to offer incentives in an attempt to attract Tenants, as these submarkets continue to have the highest vacancies. As vacancies decrease in some submarkets, Landlords are able to offer less free rent; however, they are not yet able to raise rates. There continues to be selected pockets within the Austin market that hold large amounts of available space for lease.

The Texas economy and most especially the Austin area, continue to outperform a majority of the markets around the country. It has often been said by Tenants and Owners, "thank goodness we are in Austin." Much of the country has a full blown case of the economic flu; the effects of which are still trickling down to the Austin market. Until the economy finds a way to create more jobs and remove the uncertainty looming in the air, things will continue to slowly and steadily move forward.