Here is the Q2 2012 Market Update for Austin Industrial Space. Vacancy rates for the Austin Industrial Market dropped to 10.0% this past quarter, down from 11% the previous quarter and 12.6% this time last year. Overall current rental rates for the Austin warehouse space market rose to $6.82 psf, a 0.7% increase from $6.77 psf recorded in Q12012 before operating expenses (property taxes, insurance, and utilities). Despite several large move-outs the Austin Industrial Market experienced positive net absorption of 827,624 sf, 619,840 sf of which was Flex space, and the remaining 207,784 sf being Warehouse Space. Two buildings totaling 24,770 sf were delivered to the market this past quarter and currently 9,285 sf of new industrial product remains under construction and is already 100% pre-leased.
At this point, we believe that the Austin Industrial Market will continue to experience a gradual increase in rental rates as large blocks of space continue to be leased and vacancy rates continue to decline. We still encourage office users who are less concerned with appearance and more concerned with functionality to look into Flex space as an option for new space. Flex centers are commonly conveniently located, typically offer ample parking and can be priced as much as 40% below traditional office space rates.
Austin Average- $6.82 Austin Warehouse Average- $6.00 Austin FLEX Average – $8.80
Cedar Park- $10.85 Central- $8.58 East- $5.25 Far Northwest- $6.34 Northwest- $5.64 Round Rock- $7.11 Southwest- $10.58