Northwest Austin Industrial Market Report — Austin, TX

Market Summary

Northwest Austin occupies a unique position in the Austin industrial landscape — a premium, supply-constrained infill submarket that trades more like a tech corridor than a traditional logistics node. At $19.33/SF NNN, it commands the highest industrial rents in the metro, roughly 50-60% above the eastern submarkets where bulk warehouse and distribution dominate. The product mix explains the premium: NW Austin is predominantly flex/R&D space serving the tech, semiconductor, and life sciences sectors concentrated along the Parmer Lane and Domain corridors. The submarket's relative strength is evident in the numbers. NW Austin posted the highest absorption of any Austin submarket in Q3 2025 at 219,805 SF, even as the broader metro struggled with a 2:1 supply-to-absorption ratio. IBM's 50K SF lab lease at Parmer Impact Labs and the 2.2M SF Gradiant Technology Park (breaking ground to serve semiconductor suppliers) underscore the demand profile — these are high-value tenants paying premium rents for specialized space. The risk for NW Austin is not oversupply (there's limited land to build on) but macro exposure to the tech sector. If tech layoffs deepen or semiconductor investment cycles turn, the submarket's narrow demand base becomes a vulnerability. For now, though, Apple's $400M campus expansion, IBM's accelerated move to Domain 12, and the broader semiconductor ecosystem (Samsung, NXP, Applied Materials) provide a strong demand floor.

Rent Data

Average rent: $19.33/SF. Range: $13 - $25/SF. YoY growth: -1%.

Vacancy and Absorption

Vacancy rate: 11%. Trend: rising. Northwest Austin is the tightest industrial submarket in the Austin metro, with vacancy estimated at 10-12% vs. the metro average of 14-22%. The submarket's premium positioning reflects its infill nature — limited developable land, proximity to tech campuses (Apple, IBM, Domain corridor), and a product mix heavily weighted toward flex/R&D space rather than bulk warehouse. NW Austin posted the strongest absorption of any submarket in Q3 2025 at 219,805 SF. However, even this submarket is feeling the effects of the broader supply wave, with vacancy creeping up from single digits in 2023. Rents at $19.33/SF NNN are 50-60% above eastern submarkets, reflecting the scarcity premium and higher-quality tenant base.Net absorption: 219,805 SF.

Cap Rates and Comparable Sales

Average cap rate: 7.2%. Range: 5.5% - 8.3%.

• Austin Infill Logistics Portfolio (7 buildings): $70,000,000 ($193/SF), sold 2025-03
• Settlers Grove IV, Austin: $22,000,000 ($164/SF), sold 2025-03
• Manor Business Park, Manor TX: $19,000,000 ($140/SF), sold 2025-07

Construction Pipeline

Under construction: 14,100,000 SF. Planned: 7,000,000 SF. Deliveries next 12 months: 10,000,000 SF.

Notable Market Activity

• IBM: Signed 50K SF lab lease at Parmer Impact Labs in North Austin. Accelerating move into Domain 12 (320K SF) one year ahead of schedule.
• Gradiant Technology Park: 2.2M SF industrial campus broke ground Nov 2025, designed to serve semiconductor suppliers in the Austin corridor.
• Apple: $400M campus construction phase delivering ~900K SF in North Austin, expected complete 2025.
• Nvidia: Expanding Austin footprint to 230K+ SF across multiple locations, including 99K SF at One Uptown (NW submarket).

Demographics

Population: 2,350,000. Growth rate: 2.3%. Median household income: $105,998. Job growth: 1.4%.