Texas industrial vacancy warning

Austin’s industrial market is carrying far more empty space than it did a year ago, and the vacancy rate is now back near levels last seen in 2003. (partnersrealestate.com) Partners Real Estate put Austin’s overall industrial vacancy at 14.8% in the fourth quarter of 2025, up from 13.9% in the third quarter and 11.8% a year earlier. The firm said that is still just below the market’s 15.3% high from the third quarter of 2003. (partnersrealestate.com) The rise has been driven by new buildings arriving faster than tenants are filling them. Partners said Austin delivered 2.0 million square feet in the fourth quarter of 2025, while net absorption — the amount newly occupied minus space vacated — totaled 496,632 square feet. (partnersrealestate.com) Other brokers show the same pattern, even if the exact vacancy number differs by dataset. Colliers reported Austin industrial vacancy at 19.3% in the first quarter of 2025, while CBRE said 2.9 million square feet delivered in that quarter was the largest first-quarter construction total on record for the market. (colliers.com) (cbre.com) Austin looks weaker than the state’s other big industrial markets. In April 2026 reports, CBRE said Dallas-Fort Worth vacancy was below 10%, Colliers put Houston at 7.5%, and CBRE said San Antonio vacancy had edged down from the prior quarter. (cbre.com) (colliers.com) (cbre.com) The pressure is concentrated in generic warehouse space, especially recent speculative projects built without signed tenants. Matthews said in its second-quarter 2025 Austin report that vacancy had climbed to 13.4% as big-box deliveries came in with less than 20% preleased and demand skewed toward smaller and mid-sized buildings. (matthews.com) That is pushing investors to separate commodity warehouses from harder-to-replicate property types. CBRE said Dallas-Fort Worth’s data-center pipeline reached 365.1 megawatts in the first half of 2025 and was 89% preleased, while its 2026 outlook said power access and large-scale electrical delivery now drive site selection. (cbre.com 1) (cbre.com 2) Central Texas is part of that shift. CBRE said Austin and San Antonio’s combined data-center construction more than quadrupled year over year to 463.5 megawatts in 2024, and its Austin-San Antonio market profile said hyperscalers and artificial-intelligence providers were driving land demand in the region’s northeast suburbs. (cbre.com 1) (cbre.com 2) For now, Austin’s industrial story is less about whether Texas is growing and more about what kind of buildings still lease quickly. The market is still adding inventory, but the strongest demand is showing up where power, specialization, or preleased users make the next empty box less likely. (cushmanwakefield.com) (partnersrealestate.com)