**Austin Industrial Market Favors Tenants Amid Rising Vacancy and Lower Rents**
A recently released Q2 2025 industrial market report from Savills reveals that Austin is experiencing increased vacancy rates and a decline in rental prices, largely due to a surge in industrial inventory.
As of Q2 2025, the total industrial inventory in Austin has risen to 121.9 million square feet, up from 103.3 million square feet in the same quarter last year. This increase has pushed the vacancy rate to 14.5%, up significantly from 10.7% year-over-year. Additionally, new deliveries have continued to rise, adding further pressure to the market.
These changes have contributed to a softening in rental rates. The average asking rent has decreased to $10.91 per square foot, reflecting a 7.3% year-over-year decline from $11.71.
Looking ahead, Savills notes that vacancy rates are at a five-year high, rents are continuing to soften, and new supply is still entering the market. These trends suggest favorable conditions for tenants. Despite the challenges, the report highlights ongoing positive absorption and significant investments by major firms like Tesla as indicators of sustained demand—particularly for strategically located and highly functional industrial space.
Overall, while the market currently benefits tenants, the long-term outlook remains optimistic due to steady demand drivers.
