National Real Estate Firm Descends Upon Unsuspecting Central Texas Like a Plague

In yet another thrilling installment of "Rich People Buy More Stuff," Triten Real Estate Partners has swooped in like a vulture to snatch up the 46-acre Central Texas Logistics Center in San Marcos. This mammoth acquisition includes seven buildings totaling 485,885 square feet of industrial space. Because if there's one thing we need more of, it's empty warehouses and depressed small towns.

Hays County, where this tragedy unfolds, is one of the fastest-growing counties in the nation, with a whopping 55% population increase from 2011 to 2021. Great, more people to gentrify the area and drive up rent prices. Thanks, guys.

Triten, based out of the glorious smog-pit that is Houston, specializes in supply chain logistics. This San Marcos portfolio is their first foray into the Austin area, where the demand for industrial space is apparently as strong as their desire to ruin quaint Texas towns.

Will Hedges, a Triten partner and likely a guy who wears a suit to the gym, said in a news release, “Triten continues to prove its tenacity in pursuing attractive industrial assets in coveted markets across the country.... We are pleased to add Austin to that growing list, as we now find ourselves positioned in one of the fastest-growing counties in the nation.” Yeah, Will, because what every fast-growing county needs is more industrial sprawl.

The Central Texas Logistics Center is conveniently located near Interstate 35, along the Texas Innovation Corridor, which has a staggering population of 4.7 million and a labor force of 2.4 million. Nearby developments include an Amazon Fulfillment Center, because who doesn't love a good dystopian employment opportunity? And an H-E-B Distribution Center, because nothing says Texas like a grocery store chain that pretends to care about local communities.

Because Who Doesn't Love an Industrial Warehouse?

According to so-called "experts," the demand for industrial space in the Austin region remains strong. Israel Linares, senior market analyst in Central Texas for CoStar, told the Statesman in late June that industrial tenants are still very active throughout the metro area. Because warehouses are the new hot date spot, apparently.

In the first half of this year, tenants signed leases for more than 4.5 million square feet of industrial space. Linares noted that while the market has cooled compared to the highs of 2021 and 2023, it is still above the pre-pandemic average. Because nothing says "economic recovery" like an overabundance of empty industrial buildings.

"Looking back at 2023, a little over 13 million square feet were leased, which was a landmark year for Austin. It matched some of the historic leasing volumes we saw in 2021 and 2022," Linares said in late June. Thanks, COVID-19, for making our industrial real estate market thrive while the rest of us suffered.

Avison Young's latest report reveals that the Austin region's industrial market "continues to show resiliency," with strong leasing activity totaling 1.7 million square feet in the third quarter of this year, bringing the year-to-date total to 3.7 million square feet for leases of 20,000 square feet and greater. Because we all know that the true measure of a city's success is how much square footage it can shove into warehouses.

Key Takeaways (Because We Know You Won't Read the Whole Thing)

• Occupancy levels slide: Austin's industrial occupancy rate has declined 1.6% to 89.4% year-over-year, due to new projects outpacing leasing activity. Shocker, building more than you can fill.

• Construction pipeline: Development remains active with 11.1 million square feet under construction and 5.9 million square feet already completed in 2024. Because we clearly don't have enough warehouses already.

• Large tenants contributing to growth: Notable tenant move-ins this year include Four Hands (571,000 square feet), Tesla (430,000 square feet), plastic parts manufacturer FMT (233,000 square feet), and Pro Lift Rigging (229,000 square feet). Because nothing says "economic boom" like plastic parts and rigging equipment.

In summary, Austin's strategic location and growing demand from businesses seeking proximity to key transportation routes and population centers position it for continued growth in the future. So, get ready for more warehouses, more traffic, and more gentrification.