Houston industrial market sees uptick in vacancy, while absorption remains positive

The Houston market observed an increase in vacancy, with vacancy rates reaching 7.0% for Q4 2023. This represents an increase of 170 basis points (bps) year over year and 60 bps compared with the prior quarter. While leasing has slowed from previous quarters, the Houston market remains resilient and continues to boast positive absorption. In addition, large deals are still being done, with ExxonMobil signing a lease for approximately 526,000 square feet (sf) and Daikin signing a lease for 500,840 sf at the recently built Great 290 Distribution Center. The continued trend of positive net absorption illustrates the ongoing demand for industrial space in the Houston market. Net absorption will likely remain positive; however, it will be outpaced by supply given the under-construction pipeline and leasing trailing deliveries.

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