Tesla leases over 1 million square feet of warehouse space in Kyle, Texas

Credit: Alliance Industrial Company

Tesla is once again expanding its real estate portfolio with the company signing a lease for several warehouses in Hays County, Texas, about a 40 minute drive south of Giga Texas.

The new lease was announced not by Tesla, but by Travis Mitchell, mayor of Kyle, Texas during his State of the City address on Tuesday. According to Mitchell Tesla has leased three warehouse buildings at the new Kyle 35 Logistics Park development, just 33 miles away from the company’s headquarters in Austin.

Mitchell explained that Tesla will initially occupy about 1 million square feet of the development, but real estate insiders told the Austin Business Journal Tesla could eventually lease the entire industrial park, which totals over 1.4 million square feet spread among five buildings ranging in size from 140,000 square feet to 475,000 square feet.

Tesla will use all of that space for storage and light assembly, Mitchell revealed during his address.

The $115 million Kyle 35 Logistics Park project began construction in June 2022, and at the time was billed as the first project of more than 1 million square feet in the Austin/San Antonio region. With Giga Texas just around the corner, Hays County was initially hoping to secure major Tesla suppliers or manufacturers as tenants for the project, but instead was able to sign Tesla themselves, a point which Mayor Mitchell made light of during his address.

“I was thinking that over the development of this project that eventually, potentially, we could get a major Tesla supplier or manufacturer to come and take down the percentage of this site. I’m said to report that did not happen. What we got instead was Tesla,” Mitchell said.

It is not clear how many jobs Tesla’s new warehouses will create, but when the project was pitched by developed Alliance Industrial Company, it was initially estimated the park could create 1,500 jobs in the area. However many workers Tesla employs, it will only add to their impressive workforce in Texas. Tesla is now the largest manufacturer in Austin, both by square footage occupied and the number of workers employed, which now totals over 12,000.

This is the second warehouse lease of this magnitude Tesla has signed this month. Tesla will soon be taking over a 927,000 square foot warehouse at the Matrix Logistics Center in Newburgh, New York.

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