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Distribution and third-party logistics firms are driving Houston’s industrial tenant demand.
An analysis of activity during the ten months of the year—October 2022 compared to October 2021.
Houston industrial vacancy at 5.7%
Ten months into 2022, the Houston industrial market vacancy is at 5.7%, dropping 90 basis points from 6.6% last year. Availability is at 10.5%, increasing 110 basis points from 9.4% in October 2021. The difference between this figure and the vacancy rate reflects expected future move-outs. The Houston industrial market has recorded 42 million sq. ft. of leasing activity, comprised of new leases and renewals, while net absorption (move-ins minus move-outs) is at 24.2 million sq. ft., down 8.6% year-over-year from 26.5 million-sq.-ft. October 2022 marks the second-highest amount of leasing activity and second-highest net absorption in January through October on record, with last year ranking the highest. The Houston metro NNN average asking monthly rent is $0.71 per sq. ft., up from $0.65 last year, a 9.7% increase.
Leasing activity in 2022
Notable transactions contributing to the above-average activity so far in 2022 include Macy’s 908,853-sq.-ft. relocation of its distribution and fulfillment center to the proposed Interchange 249 business park; Warehouse Services 663,821 sq. ft. renewal in Citypark East Industrial; Broadrange Logistics signing a deal for 648,720 sq. ft. in Generation Park; and CyrusOne leasing 640,000 sq. ft. in CyrusOne West III.
Port Houston posts another strong month
In September, Port Houston handled 353,525 TEUs, an increase of 26% compared to September of last year. This is the second-highest month ever for containers at Port Houston, following only August 2022. The increase in volume is largely due to demand for imported goods and a more efficient gateway, and loaded import container volume was up 31% in September over the same month last year. Overall, container volume is up 18% year-to-date at Port Houston’s terminals and is already nearing the 3M mark this year.
Director of Research
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