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

Net absorption has surpassed 1.1 million sf for the quarter dueto space that was leased earlier in the year, but not occupieduntil the third quarter. In total this year, Houston's industrialmarket has absorbed 2.6 million sf. This is a low number whencompared 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 thethird quarter, but activity is expected to slow possibly drivingdown the lease rates. Additionally, although 4.3 million squarefeet are under construction with 2.5 million sf of that beingspeculative, only five new projects were started in the thirdquarter indicating that construction is winding down.