Texas' industrial sector certainly isn't short of demand. The latest CBRE report shows that the market enjoyed 18.6 million square feet of net absorption in the fourth quarter, which is more than double that of the previous three months. Also, the fourth quarter total represents the highest seen since the second quarter of 2023.
"This growth came from significant net absorption in both the Houston and Dallas / Fort Worth Industrial markets," said CBRE.
Plus, net absorption outpaced deliveries of 10.7 million square feet.
Vacancy was also strong, falling by 40 basis points quarter-over-quarter to 8.9 percent. That's a good sign, as CBRE noted that vacancy has, for the most part, been on the rise since 2021 due to the high volume of industrial deliveries in the Lone Star state. However, construction starts came in 6.4 million square feet higher in the fourth quarter — so this will be something to watch. In the fourth quarter, new construction vacancy accounted for 51 percent of the total empty space in the market.
CBRE tracked one-year rents, which came in 1.9 percent higher year-over-year. Larger spaces, ones spanning 400,000 square feet to 800,000 square feet, performed the best, with rents surging by 9.1 percent.
Meanwhile, industrial leasing slumped in 2025 as a whole in Texas, with signings coming in 13 million square feet lower than the previous year and 14.8 million versus the total in 2023. Particularly, renewal activity was "sluggish" in the fourth quarter, with about 70 of such deals accounting for just 3.2 million square feet.
"Just under 75 renewals with a total of 6.8 million sq. ft. and an average of 98,000 sq. ft., were signed in Q4 2024," CBRE said.
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