2023 News Archive

The Houston Industrial market is beginning to see a reasonable slowdown in new construction due to the amount that was delivered to the market in the past couple of years. As of 2Q23, 3.7% of Houstons current inventory is under construction. In comparison to the national benchmark of 3.2%, Houston has seen record growth. New inventory to the market, totaling 786 million SF as of 2Q23, remains 70% available for lease. Starting in 2024, the number of new construction projects will decrease notably because of higher interest rates and increased labor and material costs.

The Houston Industrial market continues to be a hot commodity. As Houston continues to expand in many submarkets across Houston, tenant demand for industrial space is increasing. The market only has a 5.6% vacancy and is ranked in the top three major metro areas in the US for its 12-month total positive industrial space absorption of 28.3 million SF. Houston is the 6th largest industrial market in the US and the 5th largest major market with new product under construction with over 300 buildings that will add 36.5 million SF to the marketplace. The drivers behind this absorption are the port of Houston, development in e-commerce, logistics and transportation operators, accompanied by a substantial manufacturing region and petrochemical industry. Therefore, the Houston industrial tenant base has become more diverse than ever before.

Houston continues to be a thoroughbred in the industrial real estate market as we enter 2023, driven by 5.6 million square feet of new deliveries during 4Q22. Occupier demand has increased with population on the rise and the need to ship products in and out of the Houston Port. We are expecting around 55 million SF of industrial space to be completed between 2022 and 2023.