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Houston's industrial market remained one of the nation's most dynamic in 3Q25, with steady leasing activity and 10.9 million SF absorbed during the quarter. The metro's inventory now totals roughly 838 million SF across more than 20,000 buildings. However, new supply has consistently outpaced demand over the past three quarters, a trend expected to continue into 2026. This has led to modest upward pressure on vacancy, which currently stands at 7.4%. Even with this gradual softening, Houston's industrial fundamentals remain sound, supported by strong tenant demand and long-term economic growth drivers.

Houston's office market remained one of the nation's strongest in 3Q25, ranking among only three major U.S. metros with positive absorption year-to-date. Construction activity is limited, with just 2.3 million SF underway, about 80% preleased, primarily for build-to-suit and medical office projects in north and west Houston. This lack of new supply is helping stabilize fundamentals, keeping vacancy near 19.8% and average asking rents above $30 pSF. With few groundbreakings and steady demand for high-quality space, Houston's office sector is positioned for continued gradual improvement into 2026.

During the 2Q25, Houston's industrial market saw a substantial increase in new supply, with approximately 3.8 million SF of space delivered. This new inventory surpassed the 2.1 million SF of net absorption during the same period, contributing to a slight rise in the overall vacancy rate, which now stands at 7.1%. The development pipeline remains strong, with 19.1 million SF currently under construction, reflecting a 14% growth from the previous quarter. Despite the higher vacancy rate, the market remains resilient, supported by consistent demand across key submarkets and industries.