Q3 2025 | Houston Industrial Market Report

HOUSTON - Oct. 20, 2025 - PRLog -- "Although vacancy increased due to more supply added to the market than absorbed, leasing velocity has returned, up 16% from last quarter and positioning the industrial market for continued positive performance in the quarters to come."

Danny Rice | President

Key Takeaways

• New supply continued to outpace demand in the third quarter, with 4.7M SF delivered compared to 2.7M SF of net absorption.
• Construction activity surged to 21.8M SF, representing the highest level in two years and a 52.8% increase year over year.
• Leasing activity reached 10.8M SF, rising 15.8% from last quarter and slightly up from the 10.6M SF from the same period last year.
• The overall vacancy rate edged up 20 basis points to 7.3% from the prior quarter and up from the year-ago figure of 6.7%, driven by increasing deliveries.
• Average asking rents rose to $10.62 PSF, reflecting a 2.4% increase quarter over quarter and an 11.8% year-over-year growth.
• Sublease availability at 6.2M SF has been consistently increasing, up 16.0% from the previous quarter and up 24.8% compared to the same time last year.

Houston's industrial sector is demonstrating strong fundamentals and long-term potential, fueled by accelerating construction and high-impact lease transactions – even as supply outpaces demand. Leasing activity remained strong at 10.8 million square feet, slightly above last quarter and just below the same period last year.

The development pipeline is substantial, with 131 buildings totaling 21.8 million square feet, of which 28.1% is preleased. Construction is heavily concentrated in the Northwest and Southeast submarkets, accounting for 52.5% of all space underway. Notably, construction volume has increased consistently each quarter during the past year.

In Q3 alone, 72 buildings totaling nearly 7.9 million square feet broke ground. Key multi-building projects include Carson 288, four buildings totaling 995,893 square feet in the South; Gateway 59 in the Northeast with four buildings totaling 739,681 square feet; and TriPort 8 Logistics Park in the Southeast with five buildings totaling 881,521 square feet.

Read the full report at colliers.com/houstonresearch