Houston industrial real estate market reports

Q4 2022

Houston’s industrial market continues to significantly expand with 5.4 million square feet (msf) of new deliveries during the fourth quarter driven by strong occupier demand. Developers have expanded their product offerings with record-level construction totaling 31.3 msf underway currently 16% preleased. Population increases coupled with elevated shipping activity through the Port of Houston have stimulated growth in both e-commerce and consumer products. 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.

With record-level construction totals, developers are keeping pace with strong demand in each submarket. The Southeast sector currently leads all submarkets, with 7.4 msf or 24% of the market-wide construction total underway, due to the increased shipping activity at the Port of Houston. During the last 12 months, construction deliveries have totaled 23.4 msf, while leasing activity has soared to 46.0 msf and net absorption has climbed to 28.0 msf during the same timeframe.

4.9 msf

Net absorption

The net absorption pace slowed slightly during the quarter but ended the year with 28 msf absorbed as many large retailers and 3PL companies have accounted for the bulk of the growth moving into large new distribution centers.

$8.33

Direct asking rent

Rental rates have climbed by 12.9% year-over-year, driven by elevated demand and the delivery of new product. 

10.6%

Availabilities

Both direct and sublease availabilities escalated marginally during the second half of 2022 after trending downward over the last two years.

5.8%

Vacancy

The market-wide vacancy rate has trended downward over the last two years driven by strong demand outpacing construction deliveries but remained unchanged during the fourth quarter.

23.4 msf

Construction

Houston industrial developers added 5.4 msf of new product to the market during the fourth quarter, bringing the yearly total to 23.4 msf, but there remains over 30 msf of new product in the pipeline scheduled for delivery in 2023.

$107

Investment Sales

Industrial property sales price per square foot continued its upward climb to an all-time high but sales activity ended the year slightly below the prior year’s record level.

Download the 2022 Q4 Houston Industrial Market Report

Your source for the latest Houston industrial real estate reports

Stay on top of current trends affecting the industrial real estate sector in Houston. Gain an overall better understanding of Houston's industrial real estate market conditions, so you can better formulate strategies to overcome any obstacle and know how to best invest in industrial real estate in Houston.

Here, you’ll always find the latest industrial real estate market news so you can stay ahead. Come back often to see expert insights on the current and future of Houston's industrial real estate market.

Get the latest Houston industrial market reports right in your inbox