During the first quarter of 2017, 1.7M SF of Houston’s industrial inventory was absorbed, slightly less than the 1.9M SF absorbed in the previous quarter. Industrial leasing activity decreased between quarters, dropping from 5.3M SF to 3.6M SF.
The average vacancy rate increased 30 basis points over the quarter from 5.3% in to 5.6%. About 60% of the 3.4M SF of new space delivered in Q1 2017 was pre-leased and 78% of the 5.2M SF currently under construction is pre-leased. More than 38% of the 4.9M SF currently under construction is located in the East-Southeast Far submarket where the Houston Ship Channel and the Port of Houston are located. Amazon recently announced it will build another 1.0M square foot fulfillment center, this time in Katy, TX. Most of the new construction announced over the last year or so has been for distribution warehouse space, leased by logistic companies.
Q1 2017 HIGHLIGHTS
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