Q2 2019 | Houston Industrial | Research & Forecast Report

Houston's industrial market expansion continues adding 8.9M SF of new inventory in the first half of 2019
HOUSTON - July 29, 2019 - PRLog -- Houston's industrial market expansion continues with 8.9M SF of new inventory added in the first half of 2019. There are 143 buildings with 14.8M SF of space under construction and scheduled to deliver in 2019 and early 2020. Larger tenants that have or will be occupying a portion of the new inventory include Coca-Cola (1M SF), BMW of North America Inc. (140K SF), and American Furniture Warehouse (355K SF). Not all of the new construction is pre-leased which will increase the vacancy rate if not leased before delivery. The second quarter of 2019 saw an increase in vacancy but, provided leasing activity remains steady, Houston's industrial market should remain healthy. Anecdotally, new tenants in the market looking for space increased in Q2 after somewhat sluggish demand in Q1 following the tariff scare from Q4. The average vacancy rate only increased 60 basis points over the quarter from 5.7% to 6.3% even with the addition of 5.5M SF of new inventory.
On an annual basis, Houston's average industrial vacancy increased 100 basis points from 5.3% in Q2 2018 to 6.3% in Q2 2019. It rose 60 basis points on a quarterly basis from 5.7% in Q1 2019. At the end of the second quarter, Houston had 35.1M SF of vacant industrial space for direct lease and an additional 1.6M SF of vacant space for sublease. Houston's industrial market posted 1.9M SF of positive net absorption in the second quarter, pushing the year-to-date total absorption to 4.2M SF.
Houston's job growth increased by 2.6% over the year, according to recent data released by the U.S. Bureau of Labor Statistics. The Houston MSA created... To read the full report, click here: https://www2.colliers.com/en/Research/Houston/Q2-2019-Houston-Industrial

Lisa Bridges | Director of Market Research
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Tags:Market Report
Industry:Real Estate
Location:Houston - Texas - United States
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