Unlike other cities that are experiencing high vacancies and lower absorption, Houston is bucking the trend with vacancy registering 6.1% in the 292.6-million-sf inventory, according to Jones Lang LaSalle's Q3 report. Grubb & Ellis Co.'s Q3 report puts vacancy at 6.6% in a 406.5-million-sf inventory. And Cushman & Wakefield of Texas Inc.'s latest report shows 7.6% vacancy for a 325.8-million-sf inventory.

Grubb & Ellis researchers found the east southeast far submarket, encompassing the Port of Houston, has a 19.5% vacancy in its 27.2-million-sf inventory. About 1.9 million sf is under construction. But C&W sees it differently: vacancy standing at 8.9% in a 73.6-million-sf inventory and 2.7 million sf under construction.

With regard to the port, Ariel Guerrero, regional client service manager with Grubb & Ellis, says the firm's numbers take into account nearly two million sf of just-delivered space. C&W's numbers are different because it breaks out the just-completed completed construction figures from the total inventory, citing 1.6 million sf as just delivering. The JLL report didn't include submarket break-downs.

Either way, there's no doubt that the port is active. Dallas-based Granite Properties Inc. is building the 226,000-sf Bayport Logistics Center along Texas 146 between Port and Red Bluff roads. It will come on line next April. In addition, First Industrial Realty Trust of Chicago has launched construction on the second phase of its InterPort Business Park along Bay Area Boulevard. It is slated for a 2010 completion. And, the 1.2-million-sf Bay Area Business Park at Red Bluff Road and Bay Area Boulevard will deliver later this year.

"Though we've seen a rush to get down there to put up four walls and roofs, we've seen quite a bit of absorption in that submarket," says John Nicholson, a Grubb & Ellis senior vice president in Houston. "The Port of Houston remains strong and active and we're seeing a lot of interest and activity around our office for that space." The Grubb & Ellis report shows a year-to-date absorption of 677,704 sf in the submarket while C&W put absorption at 865,639 sf.

Mark Nicholas, senior vice president with Jones Lang LaSalle in Houston, is a little more pessimistic about the port's status. He considers the area overbuilt due to the 5.5 million sf that's come up in the past 12 to 18 months and more under construction. "Developers usually have a 21- to 24-month lease-up time on properties," he explains. "Trammell Crow was the first to really build institutional grade out there, East Belt Business Park, and it took four years to get it leased up."

Nicholas tells GlobeSt.com that Bayport Terminal, which a lot of developers are counting on for tenant demand, won't be 100% completed until 2012. At that time, he predicts leasing activity have picked up.

Nicholas also predicts the current leasing pace will continue through year's end. "What we're seeing is that the growth of our industrial markets has been with expansion of the existing tenant base," Nicholas says.

Grubb & Ellis' Nicholson sees a different picture although he does expect the market to remain steady through Q4. "Transactions aren't happening as fast nor are they easy as they used to be," he points out. "There's more decision-making in terms of expansion and renewals."