Houston industrial real estate market reports

Q2 2022

Houston’s industrial market significantly expands each quarter, with soaring activity almost doubling new deliveries and preleasing more than 25% of the 20.3 million square feet (msf) under construction. Population increases coupled with elevated shipping activity through the Port of Houston stimulate growth in both e-commerce and consumer products. Large retailers including Walmart and Target are occupying more warehouses and distribution centers to provide consumers with the fastest product delivery.

Developers keep pace with new projects in each submarket; the Northwest and Southeast sectors currently combine for 13.3 msf, about 66% of the total underway. Overall, during the last 12 months, deliveries and under-construction projects have both leveled out at about 21 msf each, while leasing activity has soared to 45.1 msf and net absorption climbs to 38.2 msf during the same timeframe.

609 msf

Inventory

Development activity surges during the last few years, with more than 21.7 msf added to Houston’s industrial market in the last 12 months.

6.2 msf

Net Absorption

New distribution centers with state-of-the art features are quickly leased and occupied, with e-commerce and retailers filling 38.2 msf in the last 12 months.

$8.25

Direct Asking Rent

Asking rental rates have slowly risen each quarter during the last 18 months, increasing 13.5% year-over-year to break last quarter’s record rent.

9.4%

Availabilities

Both direct and sublease availabilities have been trending down, with sublease space plunging 21% from the first quarter.

5.9%

Vacancy

Trending downward, vacancy has declined from 8.9% year-over-year.

$107

Investment Sales

Recent sales are trending higher per square foot but will not match last year’s sale volume, which broke all records throughout the year.

Download the 2022 Q2 Houston Industrial Market Report

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