Latest Insights

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 retail market looks promising as it works to keep up with rooftops and strong consumer demand. Houston retail is the 5th largest market in the US with over 428 million SF supporting its robust, growing population. With only 20.6 million SF available, its 4.8% vacancy is primarily older centers looking for new life. This lack of new product has motivated tenants and developers to deliver over 993,000 SF in 1Q23 and start construction on over 4.5 million SF of new retail projects, which is already over 60% pre-leased. The Houston region will continue to be a bright spot in the quarters ahead as jobs and growth continue to attract all ages to move to Houston or one of its many suburban master-planned communities. Houstona€™s retail sector remains optimistic due to its location, strong population, household growth, and affordability.

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.