Leading Electrical Parts Distributor Greatly Increases
Warehouse Space in Healthy Industrial Real Estate Market
As an indicator of a continually healthy industrial commercial real estate market,
Elliott Electric Supply is moving its distribution warehouse to a 144,113 SF industrial building located at 12555 Harris Branch Parkway in northeast Austin.
Among the top-ranked electrical parts distributors in the nation, Elliott Electric Supply is a regional leader in the electrical supplies distribution industry with more than 145 locations across the country.
Joe Brockman, director, Cushman & Wakefield, represented Elliott Electric Supply in this transaction and has assisted in their commercial real estate needs for the past 10 years. “The industrial market in Austin is growing with heavy anticipation for new space coming to market,” Brockman said. “I was thrilled to be able to secure this space for such an outstanding, long-term client like Elliott Electric Supply,” he continued. “The facility is fantastic and offers the unique features they need to continue their impressive growth in Central Texas.”
According to Chris Petty, Central Texas manager, Elliott Electric Supply, the company’s incredible success is driving this newest acquisition. “Our growth has been phenomenal at 15 percent or more per year — doubling the size of our operation every five years. As a result, this will be our third new distribution center in less than 10 years,” he said. Petty elaborated that the new warehouse will increase their square footage 2x and will be used to distribute product to their 11 stores and customers in the Austin metro area. “We’re extremely excited to get the new space up and running because it will enable Elliott Electric Supply to continue to expand with the rapidly growing Austin market,” Petty added.
The company will begin moving into the new space Q3 2018 and launch operations out of it by the end of the year.
Austin Industrial Market Overview
The Austin industrial market posted back-to-back quarters of positive absorption to kick-off 2018 by recording over 88,000 square feet (sf) of overall absorption during the first quarter. Vacancy rates for all industrial product types increased 40 basis points from Q4 2017 to an overall rate of 9.2%. Warehouse vacancy also increased, to 8.6%, while office service (flex) product remained steady from the prior quarter at 9.7%.
The average net rental rate for all property types for Q1 2018 was $10.24 per square foot (psf). Warehouse/Distribution rates increased once again as higher priced, newer product bumped average asking rates up to $8.21 psf, while Office service (flex) property types continue to outperform other industrial types, with an overall average rental rate of $13.37 psf.
With nearly 1.5 million square feet (sf) of new industrial product delivered to the market in 2017 and another 1.4 million square feet currently under construction, Austin should have enough excess space to fill demand for the near future. Despite this increase of new inventory hitting the market, the long-term outlook for the industrial market remains upbeat. Leasing activity remains strong and growth in Austin continues at a torrid pace. With more and more businesses making their way to the region and expanding their business footprints, the sustained economic growth should ultimately lead to a demand for both warehouse/distribution and flex space.