Colliers: Austin industrial absorption takes a hit

​​​​​AUSTIN – In its latest market update, Colliers International says the local industrial market took a big hit in the first quarter of the year, posting 622,956 sf of negative net absorption.

This is the largest loss since first quarter 2014, the report says. At that time, negative net absorption hit 771,075 sf.

"The rapid increase in rental rates seen in the past three years has slowed, and vacancy rates are rising," Colliers says.

Most of this negative absorption can be attributed to tenants moving out of large blocks of space, including UTI Worldwide moving out of 140,000 sf at Springbrook Corporate Center Building 7.

Austin’s citywide average rental rates decreased over the quarter from $10.57 per sf triple net to $10.37.

Warehouse-distribution rates increased to $7.66 per sf triple net from $7.55, and citywide flex/R&D rental rates increased to $13.93 per sf triple net, just $0.14 higher than the $13.79 average rate in fourth quarter 2016.