Houston Among Top Ten Healthiest U.S. Industrial Markets

by CoyDavidson on May 9, 2012

Houston Industrial Market Report Q1-12

Houston’s industrial market remains in the top ten healthiest U.S. Industrial Markets with low vacancy, steady rental rates and positive absorption. Houston posted 1.2MSF of positive net absorption in the first quarter and leasing activity reached 2.9MSF. Houston’s average industrial vacancy rate remained low at 5.3% in the first quarter. Houston’s overall average quoted industrial rental rate increased from $5.45 to $5.51 per SF NNN between quarters, increasing by 3.8% on a year-over-year basis from $5.31 per SF NNN.

For several years, developers have shown restraint due to the economic downturn; however, construction activity increased in 2011 and continues to remain active in the first part of 2012 with 3.0M SF in the construction pipeline. Much of the increased activity was driven by build-to-suit projects for companies expanding in and relocating to the Houston market; however, there is now more spec development, 1.6MSF, than build-to-suit at this time. As Houston’s available industrial inventory shrinks, we believe the demand for new projects will continue to increase, for both build-to-suit and spec development.

The Houston metropolitan area added 93,400 jobs between February 2011 and February 2012, a 3.7% increase. Unemployment fell to 7.2% from 8.4% one year ago. Houston area home sales increased by 16.9% compared to February 2011 sales. As Houston’s MSA continues to see healthy job growth and a strong housing market, Houston’s economy is expected to remain healthy for both the near and long-term.


  • Debra J

    Amazing! So happy to hear Houston is thriving!!

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