Industrial Tenant Market Update

The Austin Industrial market continues to show many opportunities for willing Landlords. Rental rates continue to drop below Landlord expectations, fueled by the amount of vacant spec buildings which have been built in both North and South Austin. Until more activity is generated by expansions and or new companies moving to Austin, these buildings will remain vacant. In addition, there is ample second generation space available in both markets as well.

Landlords are offering heavy incentives in an attempt to lure Tenants to their buildings. In addition to free rent, they are also offering “turn key” build outs for the right Tenants.

Austin, unlike other parts of the country, is seeing moderate activity. The majority of the activity seems to be the exercise of companies seeking new space in the beginning but ultimately the search ends by renewing in their existing space. These tenants cite the cost of new improvements, moving costs and the willingness of their current landlords to lower previous rates as deterrents to moving.