Avison Young releases Second Quarter 2026 Industrial Market Report for Houston

Industrial market continues march toward equilibrium in Q2 2026

Houston, TX – Avison Young, a global real estate advisory firm, today released its Second Quarter 2026 Industrial Market Report for Houston. Houston's industrial market recorded 5.8 million square feet (msf) of positive net absorption during the second quarter, while vacancy remained unchanged at 7.6%. Leasing activity reached 10.9 msf, driven by a diverse mix of tenants across logistics and distribution, energy and utilities, engineering and construction, and industrial equipment industries.

The market also delivered 5.9 msf of new industrial space during the quarter, while the development pipeline totaled 20.5 msf, reflecting a moderation in new construction starts compared with previous years. Continued positive absorption is helping reduce available inventory, suggesting the market is moving closer to equilibrium.

Demand was led by larger occupiers, as transactions exceeding 100,000 sf accounted for more than 50% of total leasing volume during the quarter.

"Large occupiers remain highly active in Houston, and we're seeing renewed confidence among industrial users evaluating long-term real estate decisions," said Drew Coupe, Principal, and industrial tenant representation specialist at Avison Young. "The combination of positive absorption, stable vacancy, and the current development pipeline is creating a more balanced environment for tenants. Companies with active requirements are still finding opportunities, but quality options are becoming more competitive as available inventory continues to be absorbed."

Port Houston continues to serve as a critical driver of industrial demand. The port handled 4.3 million twenty-foot equivalent units (TEUs) over the past year, representing a 5% increase and reinforcing the region's position as a major logistics hub.

Construction activity remains elevated relative to historical norms, but a slowdown in new starts combined with positive occupancy growth is helping the market work through recent supply additions. With more than 10.4 msf of year-to-date absorption and sustained tenant demand, Houston's industrial market continues to demonstrate healthy underlying fundamentals.