With Space Scarce, Land Purchases Are Plan B

AUSTIN, TX—The booming local economy continues to fuel demand for industrial space. According to the Texas Workforce Commission, the Austin-Round Rock metro area added 38,400 new jobs during the 12 months ending in June, equating to an annual growth rate of 4%, GlobeSt.com learns.  Essentially, Austin is operating at full employment with a reported unemployment rate of 3.3% which compares favorably to the Texas rate of 4.8% and the US rate of 5.1%.

This full employment translates to space needs, and for all practical purposes, the Austin industrial market is full. In fact, the market is the tightest it has been in the 30-year history of tracking local industrial lease space, according to REOC Austin's second quarter report. According to the survey of more than 38.1 million square feet of industrial properties, less than 1.83 million square feet was vacant at mid-year, which translates into an incredibly tight citywide vacancy rate of 4.8%, GlobeSt.com learns.  The second quarter vacancy rate was down from 6.4% first quarter and 9.1% recorded in the same quarter a year ago. 

Looking back just six years ago, vacancy peaked in June 2010 at nearly 24% with roughly 9 million square feet of space sitting vacant. The market has not recorded such a tight vacancy rate since the mid-1990s when the market was only half the size it is today.

Noting this lack of existing space, Trammell Crow Company and its partner, Clarion Partners (on behalf of a commingled investment fund), have acquired a 95-acre land parcel in Southeast Austin. The partnership plans to develop Park 183, a master-planned industrial business park that will deliver 964,000 square feet of class-A industrial space in multiple phases. Phase one will consist of the speculative development of two buildings totaling 247,000 square feet and significant road, drainage and utility infrastructure for the overall business park. Construction is scheduled to commence in January 2017.

“As our economy continues to expand, the industrial market has exhibited rapid growth that has pushed rental rates to an all-time high,” Brad Maples, senior vice president with Trammell Crow's Austin business unit​​ says. “Tenants across the spectrum are looking for ways to control their increasing real estate costs while still maintaining a first-class image for their growing businesses. Park 183 was specifically conceived to offer tenants class-A space at a price point that is far below all other new product in the market and more in line with historical averages.”

While the project will offer a great value to its tenants, the development will also offer features such as generous clear heights, flexible demising options and appealing front facades with expansive glass. The project will also offer an enhanced parking ratio, truck access and loading options for distribution users.

Park 183 is located in the Southeast submarket at the intersection of Burleson Road and US 183, less than two miles from State Highway 71 and in close proximity to major arteries such as Interstate 35 and State Highway 130. The site sits adjacent to Austin Bergstrom International Airport and is only 8.6 miles from downtown Austin. Park 183 will be located in the Triple Freeport Exemption Zone and benefit from the completion of the 183 South Project, which broke ground in April 2016, and at completion, will connect US-290 to State Highway 71 with uninterrupted freeway from southeast Austin to far Northwest Austin.

“Park 183 represents the single best multi-phase business park opportunity in Southeast Austin, one of Austin's preferred submarkets and one in which Trammell Crow and Clarion Partners have enjoyed perennial success as a leading owner/developer,” said Alejandro Cuadros, vice president with Clarion Partners. 

The design team for Park 183 includes STG Design, Jones|Carter, Wylie Consulting Engineers and Bihner Chin Engineering Ltd. Leasing and marketing will be handled by the CBRE Austin team of Mark Emerick, John Barksdale, Ace Schlameus and Darryl Dadon. 

AUSTIN, TX—The booming local economy continues to fuel demand for industrial space. According to the Texas Workforce Commission, the Austin-Round Rock metro area added 38,400 new jobs during the 12 months ending in June, equating to an annual growth rate of 4%, GlobeSt.com learns.  Essentially, Austin is operating at full employment with a reported unemployment rate of 3.3% which compares favorably to the Texas rate of 4.8% and the US rate of 5.1%.

This full employment translates to space needs, and for all practical purposes, the Austin industrial market is full. In fact, the market is the tightest it has been in the 30-year history of tracking local industrial lease space, according to REOC Austin's second quarter report. According to the survey of more than 38.1 million square feet of industrial properties, less than 1.83 million square feet was vacant at mid-year, which translates into an incredibly tight citywide vacancy rate of 4.8%, GlobeSt.com learns.  The second quarter vacancy rate was down from 6.4% first quarter and 9.1% recorded in the same quarter a year ago. 

Looking back just six years ago, vacancy peaked in June 2010 at nearly 24% with roughly 9 million square feet of space sitting vacant. The market has not recorded such a tight vacancy rate since the mid-1990s when the market was only half the size it is today.

Noting this lack of existing space, Trammell Crow Company and its partner, Clarion Partners (on behalf of a commingled investment fund), have acquired a 95-acre land parcel in Southeast Austin. The partnership plans to develop Park 183, a master-planned industrial business park that will deliver 964,000 square feet of class-A industrial space in multiple phases. Phase one will consist of the speculative development of two buildings totaling 247,000 square feet and significant road, drainage and utility infrastructure for the overall business park. Construction is scheduled to commence in January 2017.

“As our economy continues to expand, the industrial market has exhibited rapid growth that has pushed rental rates to an all-time high,” Brad Maples, senior vice president with Trammell Crow's Austin business unit​​ says. “Tenants across the spectrum are looking for ways to control their increasing real estate costs while still maintaining a first-class image for their growing businesses. Park 183 was specifically conceived to offer tenants class-A space at a price point that is far below all other new product in the market and more in line with historical averages.”

While the project will offer a great value to its tenants, the development will also offer features such as generous clear heights, flexible demising options and appealing front facades with expansive glass. The project will also offer an enhanced parking ratio, truck access and loading options for distribution users.

Park 183 is located in the Southeast submarket at the intersection of Burleson Road and US 183, less than two miles from State Highway 71 and in close proximity to major arteries such as Interstate 35 and State Highway 130. The site sits adjacent to Austin Bergstrom International Airport and is only 8.6 miles from downtown Austin. Park 183 will be located in the Triple Freeport Exemption Zone and benefit from the completion of the 183 South Project, which broke ground in April 2016, and at completion, will connect US-290 to State Highway 71 with uninterrupted freeway from southeast Austin to far Northwest Austin.

“Park 183 represents the single best multi-phase business park opportunity in Southeast Austin, one of Austin's preferred submarkets and one in which Trammell Crow and Clarion Partners have enjoyed perennial success as a leading owner/developer,” said Alejandro Cuadros, vice president with Clarion Partners. 

The design team for Park 183 includes STG Design, Jones|Carter, Wylie Consulting Engineers and Bihner Chin Engineering Ltd. Leasing and marketing will be handled by the CBRE Austin team of Mark Emerick, John Barksdale, Ace Schlameus and Darryl Dadon.