AUSTIN (NAI REOC Austin) – New leases and expansions in the second quarter generated 532,993 sf of positive net absorption, raising the year-to-date total to 584,526 sf, according to the local commercial real estate company.

“For the first time in several years, flex properties outpaced the warehouse/distribution market, but warehouse properties also posted positive net gains,” said Mark Milstead, vice president of industrial services with the firm.

After reaching a 20-year high of nearly 24 percent at mid-year 2010, the citywide vacancy rate dropped 5 percent to close the second quarter at 18.7 percent, down from 20.2 percent last quarter.

Leasing activity within the city’s 24.3 million sf of warehouse space yielded 100,148 sf of positive net absorption in the second quarter led by gains in the north submarket. The southeast submarket, meanwhile, had negative absorption despite Serta's 51,200-sf lease at Burleson Business Park.

The citywide Flex/R&D inventory of nearly 13 million sf had the vast majority of activity with 432,845 sf of positive net absorption, outpacing the warehouse market by more than 400 percent.

Citywide, rental rates remain below peak levels but appear to be stabilizing.