Houston industrial real estate market reports

Q4 2023

Houston's industrial market expanded slightly in the fourth quarter of 2023, with nearly 5 million square feet (msf) of new deliveries, pushing the year-end total to a record-breaking 32.4 msf. This brings the total amount of product underway to 20.1 msf while construction starts have plummeted due to many developers placing construction projects on hold in response to easing occupier demand and financing challenges. Population increases coupled with elevated shipping activity through the Port of Houston continues to stimulate growth in both e-commerce and consumer products. As a result, many large retailers and third-party logistics (3PL) companies continue to proceed with growth plans to support robust consumer growth despite lingering global economic uncertainty. 
19.5 msf       

Positive net absorption decelerates

Net absorption has cooled by 39% from its 2021 peak, a significant moderation but still soars 80.6% above the 10-year pre-pandemic average.

7.3%

Vacancy rate rises as new product comes online

Although the vacancy rate rose during the year, Houston's industrial market fundamentals remain strong, with vacancy still below the peak of 8.6% recorded in early 2020.  

32.4 msf    

Record completions overshadow market cool down

Record-breaking deliveries mask a slowdown in construction activity, fueled by easing demand and some financing challenges.

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