HOUSTON – Around 41.5 million sf of industrial space is under construction in Houston, Austin, and San Antonio combined, according to NAI Partners' latest report.
Houston-The Woodlands-Sugar Land
Houston ranks among the top ten markets for industrial space under construction at 19.7 million sf as of 4Q2021, with half of that amount already spoken for.
This year has seen more than 22 million sf of net absorption, a record year for demand. Demand has been stimulated by growth in ecommerce and homebuilding, population growth, and increasing global energy demand as many economies start recovering from the worst of the pandemic.
Houston’s industrial hotspot that serves the Port of Houston accounts for 30 percent of projects currently under construction.
Tesla’s new 4.5 million-sf Gigafactory represents almost 40 percent of the metro's industrial construction in the fourth quarter. Tesla’s relocation to Austin has also prompted Simwon, a supplier of body parts to Tesla, to open a 492,000-sf manufacturing facility in Kyle.
There are several other build-to-suits underway, including another Amazon distribution facility in San Marcos, a large facility for semiconductor manufacturer Applied Materials, and a research and development building for defense contractor BAE.
Less than 25 percent of the 12.1 million sf of space currently under construction remains available for lease.
San Antonio-New Braunfels
There is 9.7 million sf under construction in the San Antonio metro, including Amazon building or pre-leasing half of that. The growing advanced manufacturing group in the South Submarket, anchored by Toyota Motor Manufacturing Texas and Navistar, accounts for a significant percentage of the other half.
The volume of signed lease transactions year-to-date nearing the end of November hit an all-time record at 11.5 million sf and is likely to surpass the prior period’s 11.8 million sf.
In total, 135 new and renewal building lease transactions of more than 10,000 sf have been signed year-to-date.
With 1.8 million sf delivered since the beginning of the year, 9.7 million sf under construction, and an additional five million sf planned through 2022, the demand for industrial real estate continues unabated.
Get more Houston-area industrial news on the Texas Real Estate Research Center's website:
Source: NAI Partners