Economy: Austin Maintains Economic Momentum
Austin's economy remained resilient through Q3 2026, adding approximately 18,200 jobs year-over-year (YOY), up 1.3%, with 3.7% unemployment versus 4.2% nationally. Construction rose 5.5% on projects like Samsung's Taylor campus, manufacturing rebounded 1.6%, and warehouse-heavy trade, transportation and utilities grew 0.8%, while information jobs fell 4.9%.
Supply: Inventory Expands As Deliveries Pick Up
Deliveries continued to expand Austin's industrial supply, with 2.6 million square feet (msf) completed year-to-date (YTD), roughly 1.0 msf of it in Q3 2026. Leasing has not kept pace, with only 1.0 msf, or 40.0%, leased, leaving 1.5 msf available and weighing on vacancy. Just over 1.4 msf (about one-quarter) of the 5.5 msf under construction, up 19.0% YOY, was preleased. Georgetown and the Southeast hold nearly half of the pipeline, led by the 1.2 msf Crosspoint Phase II.
Demand: Leasing Momentum Accelerates
Net absorption totaled 1.1 msf in Q3 2026, lifting YTD net absorption to 2.1 msf as larger leases mature and begin to absorb. Tesla is back, headlining approximately 3.5 msf of Q3 2026 signings with over 538,000 sf leased in the Southeast submarket, a second major deal in 2026. The Georgetown submarket and the Southeast submarket claimed four of the five largest deals, while occupancies at Park 79, Building 2, a flex project of 144,000 square feet (sf) in the Far Northeast, and Poncho Outdoors' 137,939 sf at 4801 Friedrich Lane, Building 2 (Phase III) also counted toward net absorption. Georgetown's vacancy fell to 29.5%, and with occupiers committing at scale, we expect momentum to carry through 2026. Tenants are committing in large blocks: Georgetown has 2.4 msf of YTD leasing about 28% of Austin’s 8.6 msf,, and two of its Q3 deals 310,366 sf and 196,523 sf rank in the top five for the quarter.
Pricing: Asking Rents Edge Higher
The average asking rate for warehouse/distribution rose to $11.57 per square foot (psf) from $11.48 psf, while office/service-flex rose to $15.09 psf from $14.83 psf quarter-over-quarter (QOQ). Net asking rents closed Q3 2026 at $11.96 psf, up 1.5% QOQ but down 0.7% YOY from $12.04 psf. The uptick, paired with improving absorption, suggests rent normalization is leveling off and tenant demand remains healthy as the market works through elevated availability.
