Q4 2021 Houston Industrial Occupiers Guide
While the city’s office market continues to sputter, Houston’s industrial market is healthy with strong leasing activity and transaction volume even as the vacancy rate remains elevated. The main cause of the spike in vacancy has been an overly active pipeline which saw 20 MSF brought online over the past 12 months, much which was built on spec. This total was second only to Dallas-Fort Worth nationally, causing some downward pressure on asking rent growth despite healthy demand. Citywide, rents have grown 5.0% over the past year, well below the national average of 8.6%. Much of the demand continues 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. With 19 MSF under construction, Houston’s development pipeline has yet to really slow. But, if it doesn’t begin to wind down, the wave of new product could place added pressure on landlords.