Houston industrial landscape Big box vacancies climb while small bay thrives

Over the past five years, deliveries of big-box industrial buildings in Houston, especially those 750,000 square feet and greater, have accounted for the largest share of vacant space, representing 31% of total market vacancy. Big-box facilities over 500k sf also face the highest vacancy rate relative to their own inventory at 42%. In contrast, small-bay buildings under 100k sf have a vacancy rate that is 200 basis points below the metro market vacancy rate, driven by steady demand from local and regional businesses. Several of the largest recent deliveries remain vacant, including a 1.2 msf distribution center at 7505 Fisher Road in TGS Cedar Port, a 1.1 msf facility at I-10 West Trade Center, and a 1.0 msf building at Port 99 Logistics. These vacancies highlight the challenges facing the largest segment of the industrial market. Meanwhile, most new construction is concentrated in the 250k to 500k sf range, which makes up 41.4% of total development. Smaller buildings between 20k and 50k sf represent just 6.34% of the pipeline, helping explain why small-bay industrial remains tight and well-leased as demand continues to outpace new supply.