Houston industrial market vacancy low despite increasing economic uncertainty

Although the economic outlook has weakened due to inflation and rising interest rates, the Houston industrial market continues to grow. Vacancies have trended downward after peaking at 9.6% in the second quarter of 2021 and average 5.7%, down 350 basis points (bps) year over year. Meanwhile, asking rates have risen over the past 12 months to $0.57 per square foot (psf). An uptick in construction deliveries during the third quarter of 2022 was met with equally strong net absorption of 8.4 million square feet (msf), well above the 5-year quarterly average of 4.3 msf.

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