E Fort Bend Commercial Real Estate Snapshot
Key Takeaways
- Office records positive absorption and vacancy decreases
- Medical office vacancy is up quarterly and annually
- Industrial records positive net absorption and vacancy drops
- Retail records positive net absorption and vacancy falls
Office Highlights
The E Fort Bend office submarket contains 6.0M SF of office space. The submarket posted 14,820 SF of positive net absorption in Q4; however, the submarket ended 2022 recording an annual total of negative 91,965 square feet. The average vacancy rate decreased 30 basis points over the quarter from 22.2% to 21.9%. The average quoted gross rental rate increased over the quarter from $29.46 to $29.49 per SF, and leasing activity increased over the quarter from 66,459 SF in Q3 2022 to 96,277 SF in Q4 2022. There are currently no buildings under construction in the submarket.
Medical Office Highlights
The E Fort Bend medical office submarket contains 1.8M SF of medical office space. The submarket recorded -37,247 SF of negative net absorption in Q4 2022. The average vacancy rate increased 210 basis points from 10.4% to 12.5% over the quarter and increased 130 basis points annually. Leasing activity decreased 40.8% annually, but increased on a quarterly basis by 40.5%, recording 21,597 square feet in Q4 2022. The average quoted gross rental rate increased over the quarter from $28.72 to $29.10 per SF. There are no medical office buildings currently under construction in the submarket.
Industrial Highlights
The Fort Bend/Sugar Land industrial submarket contains 39.8M SF of industrial space and currently has 3.5M SF of space available. The submarket recorded 807,977 SF of positive net absorption in Q4 2022, bringing the year-end 2022 total to 2.7 million SF. Vacancy decreased from 6.5% to 5.1% over the quarter. The average asking NNN rental rate for all property types increased over the quarter from $8.94 per SF to $9.96 per SF. Bulk distribution represents 38% of the existing inventory and the average rental rate is $7.42 per SF. There are eight buildings totaling 1,088,820 SF of industrial space that are currently under construction. The largest building under construction is a 523,640-SF distribution warehouse located in the Main Central Business Park at U.S. Hwy 90 and Chimney Rock.
Retail Highlights
The Fort Bend/Sugar Land retail submarket contains 16.1M SF of retail space, 858,740 SF of which is available for lease. The submarket recorded 357,041 SF of positive net absorption in Q4 2022, pushing the year-end 2022 total net absorption to 467,098 SF. Vacancy decreased 20 basis points from 5.6% in Q3 2022 to 5.4% in Q4 2022. The average asking rental rate for this retail submarket increased from $23.09 per SF in Q3 2022 to $23.23 per SF in Q4 2022. There is one retail property currently under construction in the submarket in Brazos Town Center, which is scheduled to deliver in Q3 2023.