E Fort Bend Commercial Real Estate Trends
Key Takeaways
- Office posts negative absorption and vacancy increases
- Medical office vacancy is down quarterly and annually
- Industrial records positive absorption and vacancy drops
- Retail records positive net absorption and vacancy falls
Office Highlights
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The E Fort Bend office submarket contains 6.0M SF of office space. The submarket posted 38,344 SF of negative net absorption in Q1 2022. The average vacancy rate increased 70 basis points over the quarter from 20.9% to 21.6%. The average quoted gross rental rate decreased over the quarter from $30.42 to $29.95 per SF, and leasing activity dropped over the quarter from 100,100 SF in Q4 2021 to 34,700 SF in Q1 2022. There are currently no buildings under construction in the submarket.
Medical Office Highlights
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The E Fort Bend medical office submarket contains 1.8M SF of medical office space. The submarket recorded 20,885 SF of positive net absorption in Q1 2022,. The average vacancy rate decreased 120 basis points from 11.6% to 10.4% over the quarter and decreased 300 basis points annually. Leasing activity decreased 29.6% over the quarter, recording 25,505 square feet. The average quoted gross rental rate rose over the quarter from $29.39 to $29.49 per SF. There are no medical office buildings currently under construction in the submarket.
Industrial Highlights
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The Fort Bend/Sugar Land industrial submarket contains 38.3M SF of industrial space and currently has 3.7M SF of space available. The submarket recorded 336,952 SF of positive net absorption during Q1 2022. Vacancy decreased from 9.5% to 8.7% over the quarter. The average asking NNN rental rate for all property types increased over the quarter from $9.28 per SF to $9.41 per SF. Bulk distribution represents 38% of the existing inventory and the average rental rate ranges from $5.00-$6.00 per SF. There are nine buildings totaling 1,009,459 SF of industrial space that are currently under construction. The largest building under construction is a 325,028-SF distribution warehouse located in the Kirkwood Industrial Park on S. Kirkwood in Stafford.
Retail Highlights
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The Fort Bend/Sugar Land retail submarket contains 15.9M SF of retail space, 835,000 SF of which is available for lease. The submarket recorded 262,636 SF of positive net absorption in Q1 2022, pushing vacancy down from 6.3% in Q4 2021 to 5.6% in Q1 2022. The average asking rental rate for this retail submarket decreased from $22.63 per SF in Q4 2021 to $22.19 per SF in Q1 2022. Five retail properties totaling 92,960 SF are currently under construction, and an additional 279,000 SF is proposed.