|NGKF: Houston industrial 4Q 2015||NGKF: Houston industrial 4Q 2015||https://www.recenter.tamu.edu/news/newstalk-texas/?Item=11954||2016-02-02T06:00:00Z|
HOUSTON - Houston's economy has experienced a reality check, as oil prices have dropped during the past 18 months, leaving the outlook hazy for at least the next year.
However, the Houston economy is more diversified now than in previous cycles and less dependent on the price of oil. In 2016, construction will begin on Houston's Spaceport at Ellington Airport, reviving Space City with a launch pad for a new era of commercial space travel and a reboot of the city's aerospace economy.
The Texas Medical Center is the city's second-most prominent industry, employing an estimated 290,000 people across the region, nearly as many jobs as the 305,000 in oil and gas and related fields. Last but not least is the expansion of the Panama Canal, strengthening Houston's leadership position as the principal port of Central USA.
As a result, the Panama Canal and the Port of Houston will see a significant increase in traffic as the project concludes.
In 2016, Houston will lose jobs in sectors closely tied to energy, such as manufacturing and transportation; overall employment will still grow, just not to the extent that Houstonians are accustomed.
Houston-area refiners will continue to supply one-fourth of the nation's gasoline, diesel and jet fuel. Not tied to upstream energy are more than 125,000 manufacturing jobs Houstonians are holding. There was good news in October, when Houston surpassed 3 million jobs for the first time in the region's history.
The Houston industrial market saw more than 600,000 sf of positive absorption during fourth quarter 2015, bringing the year-to-date total to an impressive 9.1 million sf.
Vacancy for Houston's industrial market crept up to 4.9 percent in 4Q from 4.6 percent in 3Q, remaining at or below 5 percent for the 16th consecutive quarter. Average asking rents were flat quarter-over-quarter at $6.41/sf in 4Q, but increased to 7 percent year-over-year.
These strong numbers prompted new construction to meet demand: 26 buildings totaling nearly 2 million sf delivered 4Q, with almost 9 million sf still in the construction pipeline as of year-end.
As new development slows down, rental rates may go up in a generally positive environment.
|Newmark Grubb Knight Frank||Houston-The Woodlands-Sugar Land||Industrial|| https://assets.recenter.tamu.edu/Documents/MktResearch/Houston-Industrial-NGKF-QuarterlyMarketReport.pdf|
See more reports at Houston's Industrial Market Research.