Noon tells GlobeSt.com that as interest rates continue toincrease, industrial users will move away from buying facilitiesand return to leasing space as the more economical choice. To thatend, he expects that developers will start delivering morespeculative space rather than build-to-suits.
There is nearly two million sf of industrial space underconstruction in the Houston metropolitan market, according toAlexandria, VA-based Delta Associates, a subsidiary of locallybased Transwestern. About 2.2 million sf of industrial space wasdelivered this year, down from 3.1 million sf in 2003 and 4.4million sf in 2002.
As Houston's economy strengthens, Noon expects that 2005 willpost even stronger positive absorption than this year. "We'll startto see both smaller and larger deals," Noon says.
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