Houston market demand holds firm observing strong leasing and positive net absorption

The Houston industrial market remains active, seeing over 6.0 million square feet (msf) leased in Q3 2024. Much of this is attributed to large deals, including BroadRange Logistics signing a lease for approximately 1.2 msf, Lecangs signing a lease for approximately 510,000 square feet (sf), and Gulf Coast Crating signing a lease for approximately 432,000 sf. In addition to the strong leasing activity, the Houston industrial market observed positive net absorption for Q3 2024 at 5.5 msf. Net absorption for Q3 2024 outpaced new deliveries, which kept quarter- over-quarter vacancy flat at 7.5%. With construction starts slowing from previous years, the construction pipeline has reduced to approximately 11.2 msf. Going forward, if net absorption continues to trend near the five-year average, demand will likely catch up to new supply, and the previously observed trend of increasing vacancy rates will likely flatline.

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