Overall vacancy is at 7.9%, up from this time last year at 6.4%, due in part to the vacant space delivered to the market in 2019—about 64% of the total 2.5 million sq. ft. completed. Of the 1.9 million sq. ft. currently, under construction, about 76% of that space is available for lease.
Supply outpacing demand. Overall vacancy is at 7.9%, up from this time last year at 6.4%, due in part to the vacant space delivered to the market in 2019—about 64% of the total 2.5 million sq. ft. completed. Of the 1.9 million sq. ft. currently, under construction, about 76% of that space is available for lease. The vacancy rate for Class A properties is at 23.5%, up from 17.2% this time last year. The Austin industrial market has recorded 4.8 million sq. ft. of leasing activity—which is comprised of both new leases and renewals—while net absorption (move-ins minus move-outs) year-to-date is at 1.1 million sq. ft., down from 1.9 million sq. ft. year-over-year. The asking price for industrial properties is currently at a triple-net average monthly rate of $0.86 per sq. ft., up 2.2% from October 2018 at $0.84 per sq. ft.
Relocating regional operations to Pflugerville. Republic National Distributing Company, a wine and spirits distributor, is relocating its regional operations and investing $27 million in a 250,000-sq.-ft. facility located on a 32-acre site on Pecan Street, west of the State Highway 130 toll road in Pflugerville. The relocation is expected to bring 304 full-time jobs to Pflugerville. Additional companies relocating to or expanding in Pflugerville include Rosendin Electric, Austin Foam Plastics, and Essentium.
Jobless rate near historic lows. During the third quarter, the local labor market remained tight with the jobless rate near historic lows. Austin’s unemployment rate was 2.7% in September, unchanged since July 2019. This is lower than both the U.S. (3.5%) and Texas (3.4%) rates. The Austin metro added jobs at a soft annualized rate of 0.5% in the third quarter. By sector, trade, transportation, and utilities led growth (2,800 net jobs or 6.3%), followed by manufacturing (1,400 jobs or 9.2%), and information (300 jobs or 3.3%). Job reductions by sector included construction and mining (loss of 2,400 jobs or -13.3 %), health and private education (loss of 1,770 jobs or -5.5%), and financial activities (loss of 1,000 jobs or -5.8%).