Industrial Space Noose Tightening Despite New Projects

AUSTIN-Despite plans for several million sf of new space, the city’s industrial market remains tight, with a lack of space for tenants hungry for expansion, say experts in the sector.

“Austin’s industrial market has a tough time keeping up with demand,” explains Jerry Heare, an industrial specialist at NAI/Commercial Industrial Properties Co. here. “Vacancy ranges at 5% to 6% even though the increase in product construction continues at a brisk rate.”

The continued expansion of Dell Computers and Applied Materials, combined with the growing number of software companies and services to the expanding population is driving the market, he adds. According to Heare, most buildings being constructed are bulk warehouses, which are dock high and have 24-foot clear height. About one-third to one-half are being used for flex office space with dropped ceilings, air conditioning and windows in place of overhead doors. “Flex space is in demand in response to the high cost of office space,” he says.