Austin Industrial Tenant Outlook

These are the questions facing business owners in today’s market: What is the real state of the economy? When will the current market hit bottom or stabilize? Where are the opportunities for me to expand my business?

The real state of the economy is unknown at this time. There are several so-called experts who have very different opinions. We do know that today, there is a real lack of capital in the market. Lenders are scared to lend money on real estate. Companies are reluctant to take on more debt, consumers are burdened by rising prices and the uncertainty of what the future holds. Fueled by consumer spending over the last decade and the ability to borrow more money than the consumer can afford, the economy has come to a screeching halt. This affects the majority of companies in today’s market. Consumers are trying to get by with the bare necessities.

No one has a crystal ball to know when the economy may turn the corner. We do know that there needs to be capital in the market and Lenders need to lend money and companies need to borrow money to invest in their business. Companies need inventory, materials and technology to grow the business. In today’s market, these companies need to prove to the market they can repay this debt. The days of borrowing money with no documentation are over. Once Lenders can lend money to stable borrowers, the economy will start moving in the right direction.

To start, Austin is a better place to be than a lot of other markets in the economy. Austin continues to see modest job growth. Jobs equate to people having money and when people have money, they spend it. There will be opportunities for companies to negotiate favorable leases in the industrial market. Landlords continue to fight for Tenants by offering free rent or even lowering existing rental rates. If Tenants can understand their needs for the future, it is a good time to find space and lock in lower rates for their business.