Austin’s industrial market remains in a good spot, but it’s clearly shifting into a more balanced phase after several years of rapid growth.
The vacancy rate is currently around 14.9%, largely due to the nearly 60% increase in inventory since 2020. A wave of new deliveries pushed vacancy higher, but construction is now slowing. About 12 million square feet are under construction, and roughly half of that space is already preleased. With fewer new projects breaking ground, supply and demand should begin to align more closely.
Leasing picked up toward the end of 2025, with 2.4 million square feet leased in Q4 alone. For the year, net absorption is estimated at 3–4 million square feet, driven mostly by modern distribution space. While some flex and R&D properties saw move-outs, overall demand remained positive.
On the investment side, activity stayed steady, totaling roughly $842 million in 2025 transactions. Investors continue to target high-quality assets and bet on Austin’s long-term growth, supported by infrastructure investment, foreign capital, and Texas’s business-friendly climate.
Performance is split between large and small products:
While large distribution buildings absorbed significant new supply, shallow bay product is quietly outperforming, maintaining stronger occupancy and more stable demand.
Asking rents are averaging $12–$13 per square foot. Logistics rates have ticked up slightly, while manufacturing and flex rents have softened. Moving forward, pricing will vary more by location and building type.
The bottom line: Austin’s industrial market isn’t slowing — it’s normalizing. Construction is easing, demand remains steady, and smaller-format industrial space is proving especially resilient as the market works through recent supply.