Houston Industrial Market Fundamentals Stabilizing
Houston’s industrial market fundamentals continued stabilizing at midyear, with 1.1 million square feet of positive net absorption in the second quarter bringing the year-to-date total to 2.6 million square feet, a strong improvement from the negative net absorption of 22,087 square feet recorded through the second quarter last year. Occupancy also posted gains with the citywide average at 93.5 percent in the second quarter, up from 93.1 percent at this time last year. While quoted rental rates for industrial space fell below levels from this time last year, rental rates remained stable from the previous quarter.
On the leasing front, 14 leases over 100,000 square feet were signed year-to-date through the second quarter, with 5 leases over 200,000 square feet. A significant boost to the market’s stabilization has been the developers disciplined curtailment of new speculative construction activity, with only 238,518 square feet in the construction pipeline at midyear, compared to 2.6 million square feet under construction at this time last year.