E Fort Bend Commercial Real Estate Trends
The Fort Bend office submarket posted 7,992 SF of negative net absorption in Q4 2019. The average vacancy rate increased from 11.8% to 12.0% over the quarter. The average quoted rental rate increased from $28.25 to $29.55 per SF and leasing activity increased over the quarter by 78%. There are three buildings totaling 105,300 SF under construction. The largest building under construction is a 56,000-SF expansion for the Houston Community College System, located on W Airport Blvd.
Medical Office Market
The average quoted rental rate decreased over the quarter from $27.82 to $27.59 per SF. The average vacancy rate rose 170 bps from 13.8% in Q3 2019 to 15.5% in Q4 2019. Leasing activity declined by 34% over the quarter. Four buildings totaling 136,190 SF are currently under construction. The largest of the three is a 100% preleased, 87,500-SF medical office condo located at 800 Bonaventure Way.
Although the submarket recorded 144,317 SF of positive net absorption during Q4 2019, vacancy still increased due to the completion of two new buildings that were added to inventory. The addition of the unleased portion of 479,205 SF of new inventory helped to increase the average industrial vacancy rate 100 basis points, rising from 6.4% to 7.4%. The average quoted rental rate rose over the quarter from $7.38 per SF to $7.51 per SF. Currently, there are 19 buildings with 1.4M SF of industrial space under construction. The largest project is the 290,373-SF speculative industrial warehouse located in the Waypoint Business Park on Cravens Rd in Missouri City, TX.
The average asking rental rate for the Fort Bend retail submarket increased from $22.27 per SF in Q3 2019 to $22.53 per SF in Q4 2019. The submarket recorded 18,665 SF of negative net absorption in Q4 2019, increasing the vacancy rate from 5.9% to 6.3%. Seven properties totaling 174,935 SF are currently under construction. The largest project is Sienna Crossing Phase III, a 60,000-SF addition that will include Spec’s Wine and 24-Hour Fitness as new tenants. The shopping center is expected to deliver in the first quarter of 2020.
*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.