Automotive sector leads the pack in leasing activity for Houston industrial market

The Houston industrial market in Q1 2025 saw the automotive sector stand out, accounting for 28.1% of leasing activity and securing a spot among the top five industries. Key transactions included Tesla's one million square foot renewal and new deal of 616k sf at Empire West Business Park. This surge aligns with recent manufacturing commitments from Tesla, Hyundai, and Honda, indicating nearshoring and supply chain optimization.

The food & beverage production sector also joined the top five, with Constellation Beverage securing a new lease of nearly 500k sf for rail-served space at TGS Cedar Port and Red Bull taking 130k sf at Carter Crossing.

A significant shift is the return of the retail sector to the top five deal-making industries in Q1 2025, accounting for 12.8% of deals. This marks a recovery from 2024 and suggests a rebound in activity, although it remains below the pre-pandemic level of Q1 2019, where retail comprised 31.9% of the top five industry deals.

Meanwhile, the once-dominant logistics, distribution, and parcel delivery sector has experienced a slowdown as consumer demand normalizes post-pandemic.