E Fort Bend Commercial Real Estate Trends
The Fort Bend office submarket posted 57,403 SF of positive net absorption in Q3 2020, up from the 129,161 SF of negative net absorption recorded in Q2. The average vacancy rate decreased marginally to 13.5% from 13.6% over the quarter. The average quoted rental rate dropped from $30.39 to $28.44 per SF, and leasing activity decreased over the quarter by 42%. One building totaling 56,000 SF delivered during the quarter - an expansion for the Houston Community College System located on W Airport Blvd. There are no office buildings currently under construction in the submarket.
*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.
Medical Office Market
The average quoted rental rate increased over the quarter from $27.74 to $28.33 per SF. The average vacancy rate rose 50 bps from 15.3% in Q2 2020 to 15.8% in Q3 2020. Leasing activity decreased by 80%. One 12,000-SF building was completed and added to inventory during Q3 2020. Currently, there are no medical office buildings over 10,000 SF under construction in the submarket.
Although the submarket recorded 120,460 SF of positive net absorption during Q3 2020, vacancy increased due to the completion of three new buildings that were added to the existing inventory. The average quoted rental rate rose over the quarter from $8.20 per SF to $8.30 per SF. Currently, there are seventeen buildings with 1,095,700 SF of industrial space under construction. The largest project is the 326,800 SF speculative industrial warehouse located in the Sugar Land Crossroads development located at Dairy Ashford and West Airport, in Sugar Land, TX.
The average asking rental rate for the Fort Bend retail submarket increased from $23.12 per SF in Q2 2020 to $24.08 per SF in Q3 2020. The submarket recorded 61,221 SF of negative net absorption in Q3 2020, and the vacancy rate increased from 6.9% to 7.6%. Four retail properties totaling 80,165 SF are currently under construction, the largest being a 30,750-SF building in Tang City Plaza on Highway 6 in Stafford. The buildings are scheduled to deliver in Q4 2020. One 49,300-SF building delivered during Q3 2020.