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Market Report

Austin Industrial Market Report

Midyear 2023

Astronomical Inventory Expansion Eclipses
Softer Demand and Normalizes Rent Growth

Metro supply increasing at an extraordinary rate. Robust population and employment gains, including an expanding manufacturing and logistics base, have transformed Austin’s industrial sector. From the end of 2020 through the first quarter of 2023, market inventory swelled by more than 23 percent, the fastest rise among major U.S. markets by a wide margin. The next-closest metros — Charleston and Phoenix — registered growth rates between 12 and 14 percent during that span. As a result of the heightened development, roughly one-fifth of Austin’s total supply was built in 2020 or later as of the first quarter of 2023. This composition amplified the average rent as newer-built properties constitute a sizable share of marketed space. During 2021 and 2022, Austin recorded year-over-year average asking rent surges of 16.9 and 18.7 percent, respectively, setting new annual records in each year. Amid some economic uncertainty, however, the 2023 pace reverts to a more historically consistent gain.

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