Market Report

Q1 2014 | Houston Industrial | Market Report

Houston’s industrial market remains one of the healthiest U.S. industrial markets sustained primarily due to the expansion in the oil and gas industry. Texas is expected to out-produce all but one of the OPEC nations in 2014 due to the booming Eagle Ford Shale and Permian Basin, and Houston’s industrial real estate market will benefit from that growth.


During the first quarter, 1.6M SF of Houston’s industrial inventory was absorbed. Industrial leasing activity which includes renewals, reached 5.8M SF, twice the amount leased in the previous quarter. 2.9M SF of new product delivered during the first quarter and 4.0M SF of industrial space is currently under construction. Houston’s average industrial vacancy rate rose by 20 basis points between quarters from 5.2% to 5.4% due to new inventory deliveries. The citywide average quoted industrial rental rate increased 2.2% between quarters to $6.05 from $5.92 per SF NNN, and increased 6.5% on a year-over-year basis from $5.68 per SF NNN.

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