Leasing Stays Positive for Austin, San Antonio
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AUSTIN—For the smaller two of Texas’ four largest markets, the trends in office, industrial and retail are mostly upward. That is, upward except in the case of vacancies, which generally show year-over-year declines for Austin and San Antonio.
The exception to the rule, at least on a Y-O-Y basis, is Austin industrial vacancy. It finished the second quarter at 12.5%, which is higher than the previous quarter but still lower than a year ago, when it was 13.3%. The vacancy rate for Austin has bounced between 11.8% and 12.3% since then, according to Xceligent data.
Q2 saw positive absorption in the Austin SMSA’s industrial. At 54,539 square feet out of a market of approximately 47.9 million square feet, that may not be much, but it is at least positive following a Q1 that ended in the negative column.
The picture was noticeably brighter for Austin’s office market, which Xceligent notes “continues a strong growth trend” with 306,517 square feet of positive absorption. Across the Austin area, office vacancy has fallen 300 basis points Y-O-Y to 9.6%.
Most of the quarter’s leasing activity took place in class A buildings in Austin’s Northwest sector. That being said, the biggest lease during Q2 occurred in the Southwest sector: SolarWinds’ occupancy of 220,218 square feet at the Summit at Lantana.
For San Antonio office, Q2 news was also upbeat. The sector posted 297,378 square feet of positive absorption during the quarter, marking the third consecutive quarter of growth.
The vacancy rate, while still higher than that of Austin, has shown progress over the past 12 months. San Antonio office ended Q2 with direct vacancy of 17.5%, down 200 bps from a year ago. Asking rents have risen Y-O-Y, from $19.56 at the end of Q2 2013 to $19.95 a year later.
Faring even better from the standpoint of improving vacancy rates is San Antonio’s industrial sector. It decreased to 5.9% at the end of Q2, down 250 bps from the 8.4% recorded a year earlier, according to Xceligent.
Absorption continued to be positive during Q2, with 199,748 square feet absorbed. Most of that took place in the warehouse sector, with most of the space taken down in the North East and North Central sectors, Xceligent says.
Retail, as well, saw a positive Q2 in San Antonio. Leases accounted for growth of 108,746 square feet, with most of that taking place in the North Central, Far West and North West market sectors. Vacancy across the SMSA’s 47.3 million square feet is now just under 10%, down 180 bps from 11.7% a year ago, according to Xceligent.
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To view the reports for San Antonio, click here.
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