Market Dynamics Spur Surge in Industrial Construction between Austin and San Antonio
The Austin-San Antonio Corridor continues to experience substantial industrial growth, even as vacancy rates reflect recent speculative development trends. Austin’s industrial market has seen vacancy rise to a decade-high of 11.6%, largely due to an aggressive wave of speculative construction. Yet, underlying demand remains robust, driven by significant investments in manufacturing sectors such as electric vehicles and semiconductor production. “Manufacturing growth has been ascendent in the U.S. for years now,” notes Lisa DeNight, North American head of industrial research at Newmark Group, underscoring the strong long-term fundamentals of the region’s industrial market.
San Antonio faces similar trends, with vacancies increasing to 9.6%, stemming primarily from extensive new developments outpacing current absorption. However, suburban areas like New Braunfels and northeast San Antonio are notably outperforming the broader market, reflecting focused tenant demand for strategically positioned industrial spaces. According to Devin Meyer, Principal at Huntington Industrial Partners, “the San Antonio industrial market continues to attract strong demand.”
Speculative construction dominates new industrial projects, comprising over 80% of Austin’s recent developments and nearly half of San Antonio’s pipeline, according to recent market insights. This bold approach underscores strong developer confidence despite temporary vacancy challenges, indicating long-term optimism in the region’s economic fundamentals.
Several factors contribute significantly to the dynamic industrial development along the Austin-San Antonio Corridor. The region’s strategic location connecting major Texas metros is essential for logistics and manufacturing operations, providing easy access to both regional and national markets via vital transportation arteries like I-10, I-35, and Loop 410.
Furthermore, the corridor benefits greatly from rapid population and economic growth, with more than 5 million residents within a 100-mile radius. This population base creates a substantial market for consumer goods distribution and manufacturing, reinforced by major economic drivers such as the Tesla Gigafactory in Austin and expanding e-commerce distribution hubs. Carlos Marquez, a partner at Cushman & Wakefield, highlighted the area’s business landscape, stating, “With H-E-B located down the road, Amazon and Tesla nearby, there is really good momentum for suppliers and light manufacturing operations to locate here.”
Local government incentives also play a pivotal role in attracting development. Programs like Chapter 380 in San Antonio and Chapter 403 in Austin help mitigate Texas’s high property tax rates, encouraging ongoing investments in industrial infrastructure and tenant attraction efforts.
In response to this robust growth, Bob Moore Construction has emerged as a key player, demonstrating extensive regional expertise with over 3 million square feet of industrial space successfully built throughout the corridor. Bob Moore Construction is known for its ability to navigate challenging market conditions, employing advanced construction methodologies like tilt-up construction to ensure efficient, cost-effective, and timely project delivery.
A prime example of Bob Moore Construction’s capability is the I-10/I-410 Distribution Center, currently under construction in East San Antonio. This 310,000-square-foot industrial park consists of two state-of-the-art buildings. The strategically positioned facility features modern specifications ideal for logistics and distribution users, including 32-foot clear heights, extensive dock infrastructure, a 180-foot truck court, and ESFR fire protection.
Executive Vice President Mark Duvall notes, “Despite broader market challenges, strategic industrial developments like I-10/I-410 continue to see sustained interest. Our commitment to proactive project management and advanced construction practices helps our clients capitalize on regional opportunities effectively.”
Bob Moore Construction President Kyle Whitesell emphasizes the broader importance of such projects: “Developments along the Austin-San Antonio Corridor are vital to meeting the region’s growing logistical and industrial demands. We’re proud to lead projects that directly support economic and community growth.”
Stay ahead of the latest trends and insights—click here to download Bob Moore Construction’s Spring Austin-San Antonio Construction Market Report.
