Office Market
The Fort Bend office submarket posted 16,615 SF of negative net absorption in Q1 2019. The average vacancy rate rose 60 basis points (bps) from 10.3% to 10.9% over the quarter and the average quoted rental rate increased slightly by 2.1% from $26.42 to $26.98 per SF. There are two small neighborhood office buildings under 30,000 SF each currently under construction. Both of the buildings are available for lease.
Medical Office Market
The average quoted rental rate decreased over the quarter from $29.41 to $29.05 per SF. The average vacancy rate jumped 310 bps from 12.9% in Q4 2018 to 16.0% in Q1 2019. Leasing activity increased slightly from 13,845 SF to 17,151 SF over the quarter. Two buildings totaling 58,199 SF delivered in the E Fort Bend/Sugar Land submarket in Q1 2019.
Industrial Market*
The average industrial vacancy rate decreased 90 basis points over the quarter from 4.7% to 3.8%. The submarket recorded 238,977 SF of positive net absorption during Q1 2019, down from the 378,648 SF of positive net absorption recorded in Q4 2018. The average quoted rental rate fell marginally over the quarter from $6.95 per SF to $6.90 per SF. Over 2M SF of industrial space is under construction. The largest project under construction is a 477,355 SF speculative distribution center located in the Southwest Commerce Center in Missouri City, TX. In addition, Trammell Crow Company has several buildings either under construction or proposed in Park8Ninety and Dollar Tree plans to build a 1.2M-SF distribution center in Rosenberg.
Retail Market
The average asking rental rate for the Fort Bend retail submarket increased to $23.37 per SF in Q1 2019 from $23.14 per SF in Q4 2018. The submarket recorded 7,979 SF of negative net absorption in Q1 2019 and the vacancy rate increased by 10 bps over the quarter. One 16,000 SF property delivered during Q1 2019 and there are currently nine properties totaling 145,654 SF under construction. The largest project is the 28,500 SF Rivergate Plaza located in Missouri City, TX. The shopping center is expected to be completed in July 2019.
*For the purpose of this report, the geographical boundaries previously used for the Fort Bend industrial submarket have been updated to include buildings that are typically considered by our clients when they are seeking locations in the Fort Bend/Sugar Land and Missouri City areas.
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