Strong tenant demand for distribution space drove the Austin industrial market to its 24th consecutive quarter of positive net demand.
The development pipeline remained robust in Q2 2020, with 17 projects totaling approximately 1.2 million sq. ft. under active construction. Five buildings delivered this quarter, all in the Round Rock submarket, totaling 614,814 sq. ft., with 76% preleased.
Quarter-over-quarter, average asking rates rose $0.08 from Q1 2020 per sq. ft. to $9.64 per sq. ft. in Q2 2020. Flex/R&D rates increased $0.23 quarter-over-quarter to $11.95 per sq. ft., while warehouse rates declined from $7.97 last quarter to $7.66 per sq. ft. in Q2 2020.
Vacancy decreased 70 basis points to 10.1% in Q2 2020. While overall net demand remained positive, the decrease in vacancy was driven largely due to the withdrawal from the market of multiple spaces throughout the metro.