Absorption in the first quarter was approximately 470,000 sq. ft. of positive net demand with a marked increase in quarter-over-quarter vacancy to 10.6%; this increase was largely driven due to the delivery of approximately 1.3 million sq. ft. of new product to the market.
Development activity in Q1 2019 was robust, with 13 projects, totaling 1,283,812 sq. ft., going online throughout the metro. There are an additional 13 projects, totaling 1,558,055 sq. ft., currently under construction.
Development activity in South Austin continues to dominate the active pipeline, with more than 400,000 sq. ft. under construction in the Southeast and 740,000 sq. ft. under construction in Hays County. Developers continue to push south as San Antonio and Austin grow closer together.
Asking rates in Q1 2019 climbed $0.26 per sq. ft. to $10.79 per sq. ft. throughout the market, a historic high driven largely due to increasing asking costs of Class A Flex/R&D product.