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NAI Austin Releases 2007 Austin Commercial Real Estate Market Report
Every six months, NAI Austin publishes The NAI Austin Source - The Austin Metro Area Commercial Real Estate Market Report (formerly The Austin Source), a semi-annual market study. The Source data is compiled by NAI Austin broker-professionals, and is collected at the end of each study period in December and June. What makes The Source stand out from other commercial real estate publications is its attention to the market conditions for non-owner-occupied speculative industrial, office and retail buildings 20,000 square feet and larger. Other publications gather information from various public databases and lump together information by combining large/small and owner-occupied/non-owner-occupied buildings. The 2007 end-of-year Source can be accessed through the NAI Austin website at www.austinsource.com.
Industrial
Over the course of 2007, the Austin area industrial real estate market expanded by more than 1.4 million square feet. Even with such growth, it experienced the lowest vacancy rate since 2001, with a healthy 11% vacancy. Due to this low rate, industrial developers have a keen interest in the Austin area, with 976,000 square feet currently under construction and set to be completed within six months. Another result of the low vacancy rate is the increase in rental rates ranging from 8-15%, which is not likely to cease until the market vacancy rate is at 15% or more. Absorption in the industrial sector increased 17% over the 2006 figure, for a total of 1,792,693 square feet of space absorbed. 2007 was the third consecutive year in which the industrial market absorption was more than 1.5 million square feet. For more information on the Austin area industrial market or properties, contact a member of NAI Austin’s Industrial Team: Mark Milstead, Jerry Heare, David Barber, Cheryl Morse, Philip Bible, or Frank Niendorff. www.naiaustin.com
Office
The end of 2007 marked a strong year for the Austin area office space market. City-wide absorption was 628,075 square feet for the second half of the year, and rental rates continued to increase, although at a slower rate than the previous six months. There is currently an 11% vacancy rate, which is remarkable considering the large amounts of new construction in the region.
A rising rental rate and large amounts of new construction characterize a healthy market. Austin has low unemployment, positive job growth and low interest rates, which should also contribute to a healthy office market in 2008.
For more information on the Austin area office market or properties, contact a member of NAI Austin’s Office Team: Lise Wineland, Josie Marshman or Trisha Sims. www.naiaustin.com
Retail
During the last six months of 2007, retail occupancy remained relatively flat while rental rates continued to rise. The Austin area retail segment had a positive net absorption, and new construction continues to be absorbed even as more and more projects are announced by developers. These factors marked a good year for retail in Austin, even as other markets across the nation did not enjoy such success.
Although occupation has remained steady despite the addition of more retail space, only time will tell if the trend will continue.
For more information on the Austin area retail market or properties, contact a member of NAI Austin’s Retail Team: Sherry Sanchez, Travis Waldrop, Leo Morales or Ryan Coleman. www.naiaustin.com