Avison Young releases First Quarter 2023 Industrial Market Report for Houston
April 13, 2023
Vacancy rate remains relatively stable
Houston, TX – Avison Young today released its First Quarter 2023 Industrial Market Report for Houston. Developers kicked-off the year with over 33.8 million square feet (sf) in the construction pipeline, once again hitting a record high. In addition, over 6.9 msf of industrial space was delivered during the first quarter of 2023, exceeding the quarterly average of completions over the prior two years by 20.5%.
“Fundamentals for the industrial market remained very strong in the first quarter,” said Rand Stephens, Principal and industrial market specialist. “However, we do expect a slowdown in 2023 as developers and occupiers are digesting much higher interest rates and construction costs on a year-over-year basis. Nevertheless, the Houston industrial market is in a very good position to absorb an economic slowdown should that occur.”
The vacancy rate remains relatively flat at 5.9%, increasing 10 basis points quarter-over-quarter as new construction deliveries slightly outpaced significant demand.
“While deliveries of new product are at record highs, the continued strong tenant demand has kept vacancy rates at a relatively constant low,” said Drew Coupe, Principal and industrial tenant representation specialist. “With increasing interest rates and cost of land, rental rates for industrial space will continue to increase and try to keep pace with these market factors.”
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