Austin Industrial Market Report

Speculative construction persists despite rising vacancy. Between 2022 and 2024, Austin’s industrial market added more new supply than in the prior two decades combined, heavily driven by big-box distribution center development. Despite posting the highest ratio of net absorption relative to total inventory among major metros during the year ended in March, demand has struggled to keep pace with this supply surge, driving vacancy to its highest level since 2004. Construction will again be heightened in 2025, with more than 80 percent of deliveries coming from speculative builds. Much of the incoming supply is concentrated in Georgetown, Hays County and Southeast Austin. These areas saw the strongest demand over the past 12 months, led by Southeast Austin, where tenants absorbed nearly 1.7 million square feet. Leasing activity through the first half of this year shows continued strength in these well-connected areas with an abundance of modern space options, particularly west of Austin-Bergstrom International Airport, in North Austin and near Walnut Creek Business Park.