Austin’s industrial market has seen significant changes, driven by a surge in speculative development, resulting in a sharp increase in the vacancy rate, currently the fourth-highest in the nation at 9.2 percent. This surge has been influenced by Tesla’s and Samsung’s expansions, attracting suppliers and vendors to the area. Despite absorption slowing from its peak in 2022, it remains 60 percent higher than pre-pandemic levels. Additional projects, like Samsung’s chip plant, could further boost absorption to 8.3 million square feet in 2024, making it the fourth-highest in the U.S.
However, the rapid development has led to a rise in vacancies, particularly in bulk warehouses over 100,000 square feet. Austin is experiencing an unprecedented third consecutive year of 13 million square feet of completions, leading to shortterm oversupply.