Strong tenant demand for distribution space drove the Austin industrial market to its 25th consecutive quarter of positive net demand.
The development pipeline remained robust in Q3 2020 with 15 projects totaling approximately 1.34 million sq. ft. under active construction. There were no deliveries during the quarter.
Quarter-over-quarter, average asking rates rose $0.24 from Q2 2020 per sq. ft. to $9.88 per sq. ft. in Q3 2020. Flex/R&D rates decreased $0.14 quarter-over-quarter to $11.81 per sq. ft., while warehouse rates climbed from $7.66 last quarter to $8.38 per sq. ft. in Q3 2020.
Vacancy decreased 40 basis points to 9.7% in Q3 2020. As demand remains robust for distribution space, particularly for last-mile operations, Austin's industrial market will continue to see increased interest from investors who have not previously looked at the Central Texas region.