REOC: Positive outlook for Austin industrialREOC: Positive outlook for Austin industrialhttps://www.recenter.tamu.edu/news/newstalk-texas/?Item=123712016-03-04T06:00:00Z2016-03-04T17:00:00Z

​​​​AUSTIN – The local industrial market had a "trifecta of positive indicators" in the final quarter of 2015, including healthy leasing/sales activity, positive net absorption​,​ and improved occupancy, says REOC Austin in its latest market report.

“Strong market fundamentals continue to support stable rental rates and new construction,” says Mark Milstead, senior vice president with REOC Austin.

According to the survey of more than 38 million sf of industrial lease space, new leases and expansions generated 400,200 sf of positive net absorption in the fourth quarter.

The southeast sector led all sectors with 320,329 sf of positive net gain. 

For the year, the Austin industrial lease market had a net change in occupied space totaling 1.4 million sf, nearly matching the total net gain recorded for the past two years combined.

The citywide vacancy rate tightened from 7.5 percent in the third quarter to 6.9 percent at year’s end. The current vacancy rate is substantially improved compared with 10.9 percent recorded 12 months earlier, especially considering that more than 552,000 sf of new space was delivered during that time.

While quoted rental rates fluctuate some, no significant change was measured compared with the previous quarter. However, upward pressure on rents will increase as vacancy rates continue to tighten, says REOC Austin.

The cost of renting office warehouse space currently ranges between $0.50 and $0.65 per sf per month on a triple net basis. The price for bulk warehouse ranges between $0.45 and $0.60. Asking rental rates for area flex properties range between $0.80 and $1.10 per sf per month.

Austin-Round Rock
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