Despite early forecasts of declining demand for office space, industry experts say the need for commercial real estate is rebounding amid rapid growth in Round Rock, Pflugerville and Hutto.
Data from real estate services firm CBRE shows that commercial real estate continues to rise in these three cities. At the same time, vacancy rates in the area are falling, a trend that experts say is set to accelerate.
Williamson County Chief Assessor Alvin Lankford said many factors are attracting business and industry to the area, including available land.
“The flat land to the east lends itself well to these big ventures like that,” he said.
For example, a $17 billion, 1,200-acre Samsung factory slated to be built in Taylor over the next few years is expected to attract several ancillary industries that are expected to increase demand for retail space, Lankford said.
Some manufacturing companies have already announced plans to relocate to the area, such as Valex in Round Rock and Applied Materials in Hutto, while others are working to get online in time to meet plant needs. semiconductor manufacturing company Samsung.
Valex, a maker of distribution system components used in the semiconductor industry, will invest $12 million in Round Rock’s tax base and create 75 key jobs in the area, and Applied Materials, a company that supplies supplies and services to semiconductor manufacturers, is estimated to bring up to $2.4 billion in value to Hutto’s tax base and create approximately 525 jobs.
As industrial land use grows in popularity, according to data from the central assessment districts of Travis and Williamson, office real estate has also seen strong growth, both in square footage and in value.
Brentley Brinegar, owner of brokerage firm Brinegar Properties, said that was largely due to proximity to Austin and access to infrastructure.
“It’s just very easy for people to get around [in Central Texas]Brinegar said. “I think that’s really made Round Rock a really strong secondary market for Austin.”
An attractive neighborhood
In addition to land availability, Lankford agreed with Brinegar that SH 130 and
SH 45 N, two toll arteries that intersect between Pflugerville and Hutto just east of Round Rock, enhance the area’s attractiveness for business development.
Lankford said the area is also good for employers, helping to drive development through a cycle of growth that happens locally.
“We’ve already seen a lot of ads from small businesses supporting Samsung,” Lankford said. “[They are] buy real estate or build buildings to support this huge facility there. Then you will start to see more residential developments in Taylor as well as Hutto.
Representatives from Kerby Ventures, the developer of Lakeside Meadows in east Pflugerville, also pointed to the strategic benefits of being close to SH 130 and SH 45 N. Project managers James Kerby and John Guerra said the Lakeside Meadows’ 400-acre project brings new industrial, multi- and single-family housing and offices to a stretch of property from Pecan Street to Pflugerville Drive.
Amy Madison, executive director of Pflugerville Community Development Corp., said Austin Executive Airport, located south of Lakeside Meadows, just outside the city’s extraterritorial jurisdiction, is also contributing to office demand. local.
“It also gives us some really good opportunities for head office development, because people who do a lot of business need to be in the air a lot, and especially business flights,” Madison said.
With local growth increasing in several areas, the industrial property footprint in Round Rock, Pflugerville and Hutto grew by several hundred million square feet between 2021 and 2022, according to data from the Travis and Williamson Assessment District. ••Brinegar said large-scale operations such as the Amazon fulfillment center in Pflugerville, which became operational in the summer of 2021, have helped play a major role in accelerating local business growth.
Changes in the local retail market, such as increased demand for online shopping and curbside services caused by the COVID-19 pandemic, also contributed to the changes, said Bradley Dushkin, deputy director of Round Rock planning and development services. He added that the shifts in preference have materialized in recent local permit applications.
There is increased interest in smaller industrial operations, with more than 2 million square feet in the pipeline in Round Rock alone, he said.
At Hutto, Economic Development Corp. Director Bob Farley said industrial facilities serve small businesses with combined operations, and he’s seen an increase in demand.••Farley said Hutto presents an option unique compared to other major metropolitan areas. The availability of land means businesses can build to measure, rather than retrofitting or renovating existing buildings.
“They’re unlikely to find exactly what they’re looking for in an existing space,” Farley said. “It doesn’t seem to surprise anyone or slow their desire.”