Q1 2021 Houston Industrial Market Report

Despite the impacts of the ongoing coronavirus pandemic coupled with a slowdown in the energy sector, Houston’s industrial market has fared the best among all property types.

That being said, the vacancy rate has begun to spike to highs not seen in nearly 20 years. The main cause of the spike in vacancy over the past year has been an overly active pipeline which saw more than 28 MSF brought online in 2020, much of which was built on spec. This has caused downward pressure on asking rental rates, with rent growth among the lowest in the country among major metros. Much of the demand has begun to shift towards online retail and logistics away from the energy sector.

Development remains focused around Beltway 8 and the Grand Parkway, primarily to the northwest and southeast. Expect possible project delays or a potential slowdown in groundbreakings as the market tries to adjust to a new reality.


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1Q 2021 Industrial Market Graphic