X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

(Read more on the industrial market.)

HOUSTON-With the area’s industrial sector continuing to boast a single-digit vacancy, the Port of Houston and its surrounding area in southeastern Houston are driving the region’s demand. As a result, there is 2.8 million sf to 3.8 million sf coming out of the ground.

“The port’s rapid growth and expansion is leading much of the increased market demand for industrial space in the area,” Gary Mabray, a Houston principal for Colliers International Inc., tells GlobeSt.com. “While there may be a lag in leasing or selling the new product coming to market, tenant demand is strong.”

Mabray credits the overall Greater Houston activity due to both increasing business at the Port of Houston and the booming energy industry. Both drivers, he points out, only mean an increase in the demand for distribution space.

Darryl Noon, Transwestern’s senior vice president points out that Bayport Terminal, which opened earlier this year, also is driving demand and expansion, particularly expansions. “Once they get space leased up on their projects, developers will likely kick off the second and third phases,” he says.

The overall vacancy is 6.3% in the 432-million-sf inventory, according to Colliers International Inc.’s third-quarter report. In the far southeast corridor, researchers peg vacancy at 11.1% in its 29 million sf of product. Since the year started, 1.3 million sf has come on line and another three million sf is under construction.

Transwestern Houston’s research team puts vacancy at 5.5% in a 424-million-sf inventory. Net absorption was 6.4 million sf. Its team puts the 27.1-million-sf southeast far submarket at 8.5% vacant, with another 3.8 million sf being built. Nonetheless, the submarket led in terms of absorption at 2.5 million sf.

Both brokers agree the port will continue to see healthy demand, absorption and more space coming on line so long as energy and job growth continue. “With distribution activity driving much of the industrial market, many developers have begun to plan projects with more land than usual,” Mabray says. “The excess land is allowing for several adjunct facilities, including trailer parking and outside storage facilities.”

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.