Houston's industrial market has been recognized as the nation's top emerging industrial market, according to a new report. Despite the delivery of 53M SF of new industrial facility space, the industrial vacancy rate in Houston has declined, and this was cited as a key reason for the city's top-ranking. Since the beginning of 2020, Houston's industrial market has experienced impressive activity driven by strong e-commerce and wholesaler/retailer activity. A report by Cushman & Wakefield noted that Houston recorded nine deals of over 1 million SF during this period.
Houston's recognition as the top emerging industrial market underscores its potential for growth, even in the face of increasing amounts of available space. Not only Houston, but Texas as a whole, has seen a surge in real estate activity. Houston emerged at the top of the list of the best real estate market, but closely following are San Antonio, Austin, Fort Worth, and Dallas. Here are some of the recent findings about Houston’s real estate market:
- Single-family Real Estate: The years 2021 and 2022 were the best for residential development in the decade, with an estimated 55,600 units, the most across the nation, being authorized.
- Multi-family Real Estate: Permits have been issued for about 90,000 new apartments in the multifamily sector.
- Office Sector: Corporate relocations contributed significantly to Houston's office boom. Houston's office sector grew by 27 million square feet, falling behind New York City.
- Industrial Sector: Industrial space increased by about 65 million square feet, ranking first nationally.
- Self-storage: The Houston self-storage sector has also seen a significant increase in new construction, addressing the city's complex space needs. Over the last ten years, the local inventory has grown by around 5.7 million square feet.
Houston's industrial market continued to expand exceptionally in the first quarter, with 6.9 million square feet (msf) of new deliveries led by robust occupier demand. Developers have boosted their product choices, with 33.8 million square feet of building currently ongoing. Population expansion, combined with increased shipping activity through the Port of Houston, has fueled growth in both e-commerce and consumer goods. Despite persistent global economic uncertainties, several multinational retailers and third-party logistics companies continue to pursue growth plans to support solid consumer growth.
Developers are keeping up with robust demand in each submarket by building at historic levels. Due to increased shipping activity at the Port of Houston, the Southeast sector currently leads all submarkets, with 7.6 million square feet or 23% of total market building underway.
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