Q4 2020 | Austin Industrial | Research & Forecast Commericial Real Estate Report
By: Colliers International
Such monumental shifts in human behavior leveled incredible impacts on industrial demand globally, while in Austin we are benefiting from an additional set of extenuating factors that have drastically increased demand for industrial space.
With an accelerated shift in consumer purchasing to e-commerce platforms, we've seen an explosion of demand from 3PLs and fulfillment companies looking to keep up in 2020. This story would not be complete without mention of Amazon, whose local share of industrial real estate continues to grow at a blistering pace. Closing 2019, Amazon boasted approximately 1.23M SF of space between San Marcos and Georgetown. At the end of 2020, this has nearly quintupled to 6.08M SF of space occupied or under construction and at least another 1M SF in construction planning. These spaces include both spec leasing and build-to-suits like the 3.8M SF facility currently under construction in Pflugerville. Most importantly, Amazon absorbed more than 1M SF of shell space in the Austin market in 2020, which is an incredible sum considering our total market-wide absorption was approximately 1.4M SF in 2019 and 1.8M SF in 2018.
On top of the unique e-commerce demand we've seen this year, the announcement of Tesla's new Gigafactory, dubbed "Giga Texas," in east Austin is already having a profound impact on our market. The market is now awash with Tier 1 and Tier 2 suppliers all vying for Tesla-related contracts with extremely aggressive timelines. At the end of 2020, however, few, if any have been awarded their contract and are able to execute a lease. Not only are these requirements abundant in number, many of are also strikingly large for the Austin market.
Read more at: https://www2.colliers.com/