Austin's Biggest Industrial Lease Of 2015
LKQ Corp's 127k SF lease in Heritage Crossing was the largest in Austin last year. Avison Young SVP John T. Baird (pictured with family), who repped the tenant with colleagues Jeff Bodenman and Jacob Bobek, tells us the deal is a huge win for LKQ and Clarion Partners, which knocked down its Class-A development on the north side in one fell swoop. But it's also significant for Austin industrial at large: It takes another property off the market—a market already short on supply.
With only 4.8% vacancy, the availability of industrial buildings of this quality and size is exceptionally limited, John says. (He can count the number of available 100k-plus SF blocks on one hand.) Echoing findings of the latest Savills Studley report, he says the demand for large block industrial buildings is being driven not just by local and inbound startups, but also by outside sectors. Yet construction is very rare. While the office market has 2.4M SF under construction, only two industrial buildings totaling 289k SF are underway in Austin.