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 6.1M SF of office space. The submarket continued to contract and posted 59,161 SF of negative net absorption in Q3 2021. The average vacancy rate increased 100 basis points over the quarter from 18.6% to 19.6%. The average quoted gross rental rate decreased over the quarter from $33.86 to $33.68 per SF, and leasing activity increased over the quarter by 11.5%. There are currently no buildings under construction in the submarket.
Medical Office Highlights
The E Fort Bend medical office submarket contains 2.3M SF of medical office space. The submarket recorded 4,378 SF of positive net absorption in Q3 2021, an improvement over the previous quarter’s negative net absorption of 1,965 SF. Leasing activity decreased over the quarter, recording 24,614 square feet. The average quoted gross rental rate rose over the quarter from $27.51 to $28.00 per SF. The average vacancy rate decreased slightly from 14.6% to 14.4% over the quarter and decreased 60 basis points annually. There are no medical office buildings under construction in the submarket.
The Fort Bend/Sugar Land industrial submarket contains 37.6M SF of industrial space and currently has 4.5M SF of available space. The submarket recorded a historical 2,035,462 SF of positive net absorption during Q3 2021, half of which was due to Amazon’s move into its new Missouri City facility. Vacancy decreased slightly from 9.0% to 8.9% over the quarter and 2.2 million SF of new product was delivered during the quarter. The average asking NNN rental rate for all property types increased over the quarter from $8.43 per SF to $8.76 per SF. Bulk distribution represents 37% of the existing inventory and the average rental rate is $6.00 per SF. There are seven buildings totaling 998,615 SF of industrial space currently under construction. The largest building under construction is a 440,000-SF warehouse located in Park 8Ninety on Highway 90A in Missouri City.
The Fort Bend retail submarket contains 15.9M SF of retail space, 1.2M SF of which is available for lease. The submarket recorded 154,034 SF of positive net absorption in Q3 2021, pushing vacancy down from 7.4% in Q2 2021 to 6.5% in Q3 2021. The average asking rental rate for this retail submarket increased from $23.32 per SF in Q2 2021 to $23.51 per SF in Q3 2021. Ten retail properties totaling 292,770 SF are currently under construction, and an additional 184,000 SF is proposed.