A massive business park that broke ground last year at 5840 Interstate 35 North in San Marcos, about 30 miles south of Austin, is slated to finish its first phase of construction ahead of schedule, St. Clair Commercial Realty founder Greg St. Clair said.
Phase 1 of the San Marcos Business Park was initially slated for completion at the end of Q2 but now will be done this April, St. Clair told Bisnow during the 2026 Austin Industrial Summit at the Renaissance Austin Hotel on Feb. 5.
In total, the business park is a 666K SF, three-building development designed as single-tenant or two-tenant industrial warehouses to support distribution and manufacturing operations in the region.
The first phase entails the construction of Building C, a 377,300 SF Class-A industrial building with a 36-foot clear height, 80 dock-high doors, two drive-in doors, and a 185-foot truck court with 104 trailer stalls. It also includes roughly 3,500 SF of potential office space.
The building costs $22M to construct, according to a San Antonio Express-News report. JLL worked on behalf of the borrower, Ledo Capital Group, to secure a construction loan through a regional bank for the project. The loan amount was not disclosed by JLL.
At the event, St. Clair said maintaining a fast pace will be essential for industrial projects moving forward.
“Speed to market lets you be at a position where you can executive a deal quickly,” he said.
The region’s industrial real estate pipeline is now brimming with opportunities for deals, with 14.1M SF of industrial space under construction at the end of 2025. A robust industrial pipeline in recent years has led to 13.9% vacancy rate in Austin, a two-decade high, according to Matthews’ Q4 2025 market report.
Some 8.1M SF of new industrial space delivered in 2025, according to Cushman & Wakefield.
Industrial asking rent per square foot has dropped 14.2% from $13.52 at the end of 2024 to $11.86 at the end of 2025.
Bisnow
Gordon Highlander’s Cody Bailey, St. Clair Commercial Realty’s Greg St. Clair and St. John Properties’ Brooke Harlander spoke at Bisnow’s 2026 Austin Industrial Summit at the Renaissance Austin Hotel on Feb. 5.
Because the influx of new Austin industrial deliveries have outpaced tenant demand, tenants can now be selective about their options.
Many may be looking toward the affordability and flexibility of shallow-bay properties, or multitenant properties between 20K SF and 150K SF, said Rupe Gopani, founder and CEO of Blue Acre Development.
At the event, Gopani said some commercial businesses that would not traditionally locate in industrial spaces are choosing to do so because of the affordable rents.
“Think automotive users, CrossFit gyms, subcontracting groups, IT firms, small e-commerce businesses,” he said. “If you need an office and you also need a workshop area or a storage component to your office area, this product is perfect for you.”
Shallow-bay spaces, also referred to as industrial-flex or office-flex spaces, have seen considerable growth across Texas. In Austin and Houston, for example, the stock of industrial properties smaller than 50K SF has increased at more than twice the national rate over a five-year period, CoStar reports.
