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Industrial Market Insight

Austin Q4 2023 Market Stats

$17.75
Avg. Gross Rent
9.5%
Vacancy Rate
4.4M
SF Delivered
16.5M
SF Under Construction

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The Impact of Tesla’s Gigafactory in Austin

The “Tesla Effect” in Austin is undeniable as the electric vehicle giant continues to shape the city’s economic landscape. Since relocating its headquarters to Texas in 2021, Tesla has become a major player in the region, employing over 20,000 people and contributing significantly to economic growth.

During a recent meeting with the Travis County Commissioners Court, Tesla revealed that its Gigafactory in Austin generated over $2.1 billion in sales activity within Travis County in 2022. This includes Tesla’s operations and its extended supply chain, marking a substantial increase from $385 million in 2021. The facility, spanning 10 million square feet, manufactures not only vehicles but also driving units, battery packs, and cells for batteries, showcasing Tesla’s commitment to vertical integration.

Beyond production, Tesla’s economic impact extends to ancillary facilities, with an expected total investment of over $10 billion. The company has already invested $5.8 billion in the factory, with a peak workforce of 5,000 – 6,000 during construction.

In terms of wages, Tesla’s Austin facility paid $469 million in 2022, a significant increase from $126 million in 2021. The average wage was $74,206, rising to $131,020 when factoring in equity offered to employees through company shares. Giga Texas contributed $987 million to the gross state product in 2022, indirectly supporting 5,000 jobs.

Tesla’s impact is not limited to Austin’s city limits; plans to lease and renovate an industrial warehouse in Hutto signal further growth. This aligns with the city’s strategic position as a hub for future-focused development.

As Tesla’s influence expands, the economic resurgence it has ignited, coupled with other major investments like Samsung’s $17 billion plant, positions the Austin MSA for a promising future as a hub for innovation and sustained economic prosperity.

Austin Industrial Rental Rates

2023 Q314.6020.9017.75

Quarter Warehouse Flex Total
2018 Q1 9.72 13.11 11.42
2018 Q2 9.30 12.10 10.7
2018 Q3 8.05 13.19 10.62
2018 Q4 9.41 13.54 11.48
2019 Q1 9.40 14.48 11.84
2019 Q2 9.34 13.50 11.42
2019 Q3 9.51 13.84 11.68
2019 Q4 9.88 13.33 11.61
2020 Q1 10.14 14.48 12.31
2020 Q2 10.51 14.92 12.72
2020 Q3 9.10 14.89 11.99
2020 Q4 9.34 14.19 11.77
2021 Q1 9.34 16.00 12.67
2021 Q2 10.27 18.60 14.14
2021 Q3 10.27 16.68 13.48
2021 Q4 11.48 15.84 13.66
2022 Q1 12.08 16.43 14.26
2022 Q2 11.80 17.21 14.50
2022 Q3 12.65 17.62 15.15
2022 Q4 12.95 16.28 14.62
2023 Q1 13.14 17.83 15.49
2023 Q2 13.76 19.39 16.56
2023 Q4 13.79 18.96 16.38

*Research information is sourced from CoStar data compiled through ECR from custom reports using existing, non-owner occupied properties above 10,000 SF.

Austin in the News

No Vacancy? Not Anymore: Industrial Tenants Have Leverage At Last October 2023 Bisnow Austin Real Estate Market Still Burning, According to Urban Land Institute Study November 2023 ABJ US Industrial Market Continues to Slow as Record Amount of Construction Delivers October 2023 ABJ After 12 Years, Site Selection Magazine Puts Texas Back on Top of Prestigious Ranking November 2023 ABJ

 

Austin Q4 2023 Industrial Development Pipeline

 

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