Latest Quarterly Snapshot

In 2Q24, the Houston Industrial market continued to thrive due to sustained tenant demand, which fueled active leasing activity and led to several large deals being finalized. This momentum resulted in positive net absorption, with 5.5 million SF of space absorbed. While net absorption has remained relatively steady on a year-over-year basis, it showed an uptick compared to the previous quarter. Moreover, with a substantial 27.6 million SF of tenant demand in Houston, the market is set for continued expansion. This persistent industrial activity is anticipated to further decrease vacancy rates as 2024 progresses. Additionally, economies of scale play a significant role, as tenants who lease larger spaces often secure lower per-square-foot rates. This makes leasing more industrial space a cost-effective option for tenants.

In 2Q24, the Houston office market showed mild activity, with lease transactions totaling about 2.0 million SF for the third quarter in a row. Despite economic challenges, Houston has demonstrated resilience compared to the national office market, rebounding from a severe recession. The limited availability of capital has restricted new construction, tightening the supply of premium office spaces. Moreover, since roughly 80% of the projects in progress are preleased, the influx of new supply has a minimal effect on the market. Although overall office demand in Houston is on the rise, the momentum in leasing activity has been slower to follow.

Throughout 1Q24 the Houston Land market continued to be active with a healthy slate of development projects. Most of these projects are single-family residential projects and several are large, master-planned, mixed-use developments. As a result, single family home sales rose from 7,256 in March of 2023 to 7,926 in March of 2024. The inventory in Houston's housing market remains tight, but is gradually increasing towards more balanced levels. As of early 2024, the housing inventory stands at about 3.3 months, which is an improvement compared to the extremely low levels from previous years. These statistics indicate we are still in a seller's market.