While leasing activity has been down across much of Austin’s commercial real estate market due to COVID-19, Austin’s industrial leasing has been on the rise in 2020.
E-commerce-related businesses continue to be a major driver of industrial leasing activity … also active in the Austin market are home goods, logistics, and manufacturing companies looking to expand their presence in Central Texas.”
In this article, we highlight the five largest industrial leases signed in the Austin area in 2020.
5. Four Hands
Size: 137,939 SF
Building: Southpark Commerce Center Phase III Bldg. 2
Submarket: Southeast
Industry: Home Furnishing
Photo courtesy of CoStar.
Four Hands, a home furnishing company based in Austin, leased nearly 140,000 square feet of industrial space in 2Q 2020. Four Hands has been steadily growing its footprint in southeast Austin, and already occupies space at Southpark V and their office and showroom space at 2090 Woodward Street.
In a 2018 interview with the Austin American Statesman, Four Hands CEO, Matthew Briggs, announced plans to reach “$250 million in revenue within five years.”
Southpark Commerce Center is a five-phase, multi-owner industrial development located in southeast Austin at the intersection of IH-35 and TX-71.
4. Amazon
Size: 305,768 SF
Building: Park 35
Submarket: Buda
Industry: E-commerce
Photo courtesy of CoStar.
The first of three Amazon transactions to make the list of the largest industrial deals signed in 2020. Amazon also signed a renewal this year for 111,300 square feet at Northtech Business Center, which didn’t make this list.
Amazon started the year strong with a lease of over 300,000 square feet at Park 35, a development from Exeter Property Group, in 1Q 2020. Located off IH-35, just south of the TX-45 intersection, between Buda and Austin, this location will serve as a last-mile distribution facility for Amazon’s extensive distribution network.
The facility is expected to create hundreds of jobs.
We are proud that Amazon selected Buda, bringing hundreds of good-paying jobs and opportunities for Buda residents.”
– Jennifer Storm, Board President, Buda Economic Development Corp.
3. Amazon
Size: 307,840 SF
Building: Kyle Crossing Business Park Bldg. 2
Submarket: Hays County
Industry: E-commerce
In 3Q 2020 Amazon announced yet another expansion along IH-35 in the Austin area, this time at Kyle Crossing Business Park in Kyle, Texas.
This location is expected to employ 200 people and will serve as yet another logistics hub for Amazon along the IH-35 corridor.
Demand for high-quality industrial space has surged along with online sales in the first half of this year. Kyle Crossing offers brand new facilities in a highly accessible location that is perfectly situated to serve two of the nation’s fastest-growing metro areas.”
– Brian Masterman, Vice President, Majestic Realty Co.
Kyle Crossing is a two-building industrial development from Majestic Realty Co. In October 2020, the City of Kyle announced that Lowe’s had signed a lease for 120,000 square feet at Kyle Crossing.
2. BAE Systems
Size: 390,000 SF
Building: Parmer Austin
Submarket: Northeast
Industry: Aerospace and defense technology
Photo courtesy of Karlin Real Estate.
A rare transaction that makes the top of both this list and our list of the largest office transactions in Austin, BAE Systems’ new Austin campus is a mix of both office and manufacturing space.
The 390,000-square-foot lease at Parmer Austin is the latest expansion for BAE in Austin. Roughly half of the space will be used for manufacturing, with the rest serving as office space. This expansion is expected to bring 700 jobs to Austin and will be completed in 2022.
This expansion will continue our longstanding legacy of innovation in Austin, while also preparing us for our projected engineering and manufacturing growth. Austin is an ideal location to attract the talent we need to deliver the latest capabilities to our customers.”
– Dave Harrold, Vice President and General Manager of Countermeasure and Electromagnetic Attack Solutions, BAE Systems
Parmer Austin is located along Parmer Lane just east of IH-35 in northeast Austin. Karlin Real Estate owns the property, and Trammell Crow is acting as the project’s master developer. Other tenants at the project include 3M, Apple, and The Home Depot.
1. Amazon
Size: 442,019 SF
Building: Chisholm Trail Trade Center
Submarket: North
Industry: E-commerce
Photo courtesy of Transwestern.
Unsurprisingly, the largest Austin industrial lease in 2020 was signed by Amazon. The lease was signed in 2Q 2020 for nearly 450,000 square feet at Chisholm Trail Trade Center in Round Rock, Texas.
According to the Austin American-Statesman, Amazon could employ between 700 and 900 people at the facility.
Amazon will occupy all three buildings at Transwestern’s newly constructed project, which will serve as another last-mile distribution facility. The project is located off IH-35 and Old Settlers Boulevard.
Conclusion
The industrial market as a whole has seen a surge of activity this year, but this year’s largest leases can mostly be attributed to one name: Amazon.
The increased prevalence of working from home and reduced traffic to brick-and-mortar stores has led Amazon to grow substantially in the Austin area, and all indications point to that growth continuing into 2021. Along with these new leases, Amazon is also currently under construction on its “Project Charm” facility in Pflugerville, which is expected to be 3.8 million square feet and create over 1,000 jobs. Next-day delivery requires a lot of industrial space, and Amazon is clearly trying to keep up with demand.
