The Spec Craze: Industrial Real Estate Boom in Austin

  • January 12, 2023
Spec Craze Industrial Real Estate Image

The fact of the matter is, if you want to have the utmost success in finding an industrial property, you need to hire a professional. In doing so, you save yourself a considerable amount of time that you would have spent poring over the internet. A real estate broker has the education and experience to act as your mediator. After a discussion of your preferences, they will find properties that meet your criteria. From there, they will get in touch with the agents of sellers in your area and schedule your appointments accordingly.

One of the biggest benefits of teaming up with an industrial real estate broker is that they are well-versed in market trends. They have the analytical tools and databases to make the best decisions possible on your behalf. Even so, it is a good idea for you to keep up with where the market stands, too. This way, you can be smarter about how to handle your investments. Find out what is currently happening with industrial real estate in Austin.

What is Industrial Real Estate?

When you hear the words “industrial real estate,” you may picture a factory. However, this comprehensive subset of real estate extends far past that image. Industrial real estate encapsulates land and buildings that accommodate industrial activities. These activities include research, production, manufacturing, and distribution. Essentially, it is the properties that are not for public commercial use, where the behind-the-scenes work is going on. Leases for industrial buildings tend to last a long time, and they are often very low maintenance. Both of these factors are hugely beneficial for investors hoping to yield massive returns.

Class Types of Industrial Real Estate

There are three different classes of buildings that you should be aware of—Class A, Class B, and Class C. Property classifications help investors understand the value and risk of that property. Some industrial real estate properties experience capital appreciation (a rise in an investment’s market price), while others have the goal of capital preservation (avoiding loss of value). Let’s dive into each of these classes of industrial real estate in Austin to establish which is the best option for you.

Class A

The highest-quality buildings on the market are known as Class A. Oftentimes, these buildings were constructed in the last 15 years. Because they carry so few risks and offer the opportunity to preserve capital, landlords are able to price these properties at top dollar. This means Class A properties bring in high-income earning tenants.

Class B

While Class B buildings are older than Class A, they are not necessarily in disrepair. Many of these buildings simply offer fewer luxurious amenities. It can be easier to find an attractive deal with Class B properties. If you are an investor looking for an immediate cash flow, this is a desirable type of industrial real estate in Austin.

Class C

Relative to Class A and B buildings, Class C buildings are not highly profitable. Investors will often purchase these properties with the goal to renovate them. Therefore, passive investment opportunities are less likely with a Class C. If you are not interested in dealing with the maintenance issues of a building that is over 20 years old, step back from Class C’s.

Examples of Industrial Real Estate

As we mentioned earlier, the types of industrial properties are vast. Some of them are capable of accommodating multiple industrial uses. Property owners should be aware of which kinds of tenants will be occupying the space. Companies that are focused on short-term growth, for instance, are recommended to lean toward spec buildings. These do not require as much upfront capital investment as a custom building. Check out these three types of properties that you can invest in.


When you decide to invest in industrial real estate in Austin, it may be with the intention to obtain a warehouse. This can either be a bulk warehouse or a flex warehouse. A bulk warehouse is the largest industrial property available, possibly coming in at over one million square feet. Alternatively, flex warehouses are known to accommodate a wide variety of users, so they are highly sought after by different businesses.

Data Centers

There are several important services that come out of a data center. For instance, data storage and recovery. Data centers are spaces that are designed to support business applications and activities, so they require high-quality technology. They need to have access to a large power supply, so they should be in close proximity to major communication trunk lines.

Heavy Manufacturing

Are you looking for industrial real estate in Austin for the next branch of your large national company? Heavy manufacturing properties are great for those who utilize heavy machinery. Because of how inconvenient it is to relocate such operations, tenants are likely to stick around for a long time. These properties can also be very customized for the specific requirements of the current user.

What is Driving the Spec Craze?

Currently, Austin ranks third in the Southwest for industrial space. As we push into 2023, it is important to note that industrial real estate across the nation has continued to see strong demand. CoStar reports that, during the third quarter, record highs were hit for leasing of logistics, manufacturing, and warehouse properties. There were at least 83 million square feet of industrial leases recorded in August of 2022 alone. It is clear that despite capital costs rising and inflation driving up costs for businesses, investors are not pulling back. Major United States retailers are even announcing plans to open more large distribution centers.


It is critical that you work with a team of experienced and ethical brokers when investing in industrial real estate in Austin. Commercial Industrial Properties has been an integral part of Texas’s growth for nearly five decades. Over this period, we have evolved and expanded to become a leader in not just industrial real estate, but also retail, land, and office space. We are a full-service real estate firm that is dedicated to our wide array of clients. We would love to discuss your needs as a landlord or tenant, so send us a message.


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