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HOUSTON-A third-quarter report compiled by the CB Richard Ellis Co. here says Houston’s industrial market gave a credible performance considering the national economy’s reputed slowdown and anticipated recession. The indicators show that vacancies have risen, but only slightly.

The report puts overall vacancy for the entire city at 7.52% from an adjusted second quarter rate of 7.2%. The rise, according to the report, is due to a delivered 1.5 million sf of multi-tenant construction, all of which is nearly 100% available. The report also notes that, “single tenant space remains tight with a citywide vacancy of 3.59%, down from 3.73% recorded in the second quarter.”

Net absorption has surpassed 1.1 million sf for the quarter due to space that was leased earlier in the year, but not occupied until the third quarter. In total this year, Houston’s industrial market has absorbed 2.6 million sf. This is a low number when compared to the 3.5 million absorbed by this same time last year, however the numbers aren’t tragic.

The report also notes lease rates remained steady through the third quarter, but activity is expected to slow possibly driving down the lease rates. Additionally, although 4.3 million square feet are under construction with 2.5 million sf of that being speculative, only five new projects were started in the third quarter indicating that construction is winding down.

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