E Fort Bend Commercial Real Estate Trends
- Office vacancy increases, but so does leasing activity
- Medical office vacancy increases and average rents drop
- Industrial vacancy increases as new inventory delivers
- Retail records negative net absorption and vacancy increases
The E Fort Bend office submarket contains 6.0M SF of office space. The submarket continued to contract and posted 59,580 SF of negative net absorption in Q2 2021. The average vacancy rate increased from 17.8% to 18.6% over the quarter. The average quoted gross rental rate decreased over the quarter from $31.21 to $30.92 per SF, and leasing activity increased over the quarter by 12.5%. There are currently no buildings under construction in the submarket.
Medical Office Highlights
The E Fort Bend medical office submarket contains 2.2M SF of medical office space. The submarket recorded 446 SF of positive net absorption in Q2 2021, an improvement over the previous quarter’s negative net absorption of 15,050 SF. Leasing activity increased over the quarter, recording 43,804 square feet. The average quoted gross rental rate dropped over the quarter from $27.65 to $27.38 per SF. The average vacancy rate remained unchanged at 16.8%. There are no medical office buildings under construction in the submarket.
The Fort Bend/Sugar Land industrial submarket contains 34.3M SF of industrial space and currently has 4.8M SF of available space. The submarket recorded 247,083 SF of positive net absorption during Q2 2021, down from the 390,621 SF recorded in Q1 2021. Vacancy increased from 7.8% to 9.0% over the quarter due to the delivery of 712,600 SF of new product. The average asking NNN rental rate for all property types decreased slightly over the quarter from $8.48 per SF to $8.43 per SF. Bulk distribution represents 32% of the existing inventory and the average rental rate is $6.60 per SF. There are 16 buildings totaling 3.0M SF of industrial space currently under construction. The largest building under construction is a 1.1M-SF Amazon fulfillment center located in the Fort Bend Business Park.
The Fort Bend retail submarket contains 15.8M SF of retail space of which 1.3M SF is available for lease. The submarket recorded 94,434 SF of negative net absorption in Q2 2021, pushing vacancy up from 6.9% in Q1 2021 to 7.5% in Q2 2021. The average asking rental rate for this retail submarket decreased from $23.45 per SF in Q1 2021 to $22.32 per SF in Q2 2021. Eight retail properties totaling 294,820 SF are currently under construction, and an additional 160,000 SF is proposed.