The beginning of 2020 saw the Austin industrial market continue to slip as new development activity pressed on market-wide asking rates and vacancy.
Despite slackening market fundamentals, developers have remained bullish on Austin's market as five more projects kicked off over the quater, bringing total active construction to approximately 1.2 million sq. ft., with zero preleasing activity registered as of quarter-end.
Citywide average asking rents continued to decline from their historic highs in Q1 2019, falling to $9.56 per sq. ft. in Q1 2020. Flex/R&D rates fell $1.64 quarter-over-quarter to $11.72 per sq. ft., while warehouse rates rose from $7.79 last quarter to $7.97 per sq. ft. in Q1 2020.
Unemployment in the Austin metropolitan area fell to 2.6% in February 2020, well below the state average of 3.5% and the national average of 3.5%.