In Austin, Demand for Industrial Real Estate Far Outstrips Supply

Arrive Logistics shows how tenant demand is driving market


By Parimal M. Rohit | Originally Published in the Austin Business Journal

Investor interest and tenant demand continue to drive heightened activity in what is arguably the Austin area’s strongest real estate asset class: industrial.

Already this month a nearly 400,000-square-foot industrial business park has changed hands and a pair of companies announced significant expansions in industrial space, including a roughly 21,000-square-foot lease in Taylor that will serve as a springboard for a food manufacturer’s national expansion.

NAI Partners’ most recent market snapshot of the Austin-area industrial sector, released Sept. 17, showed demand for industrial space far outpaced supply during the first eight months of 2021. Demand was at 4 million square feet between January and August, compared to a supply of 1.2 million square feet.

Arrive Logistics eats up more space

Austin-based Arrive Logistics Inc. has expanded and extended its lease with landlord Mohr Capital in MetCenter Business Park, a 550-acre business park near Austin-Bergstrom International Airport, it was announced on Sept. 14.

Arrive, a freight brokerage that has seen its headcount and revenue surge in recent years, signed a 116,000-square-foot lease in MetCenter’s Building 15, which is 38,000 square feet larger than the 78,000-square-foot flex space the freight brokerage previously had at buildings 14 and 15.

Arrive had more than 850 employees working at buildings 14 and 15. The freight brokerage plans to hire another 1,000 employees within the next 12 months, according to an Arrive spokesperson.

The company recorded revenue of nearly $811 million in 2020, according to Austin Business Journal list research.

The lease expansion and extension will run through December 2031.

“The trend in tech and logistics companies seeking flex office/industrial space outside of Austin’s urban core has only continued to grow,” Rodrigo Godoi, managing director of investments for Mohr Capital, said in a statement. “Arrive Logistics is a perfect example of a credit tenant on the cutting edge of its real estate strategy. We’re pleased to have worked with the company to negotiate its lease expansion and long-term occupancy in one of Austin’s most desirable mixed-use business parks.”

In 2019, Dallas-based Mohr Capital acquired five buildings encompassing 404,800 square feet in MetCenter from Zydeco Development. Mohr sold one of those buildings, occupied by Amazon, in May.

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