HOUSTON - The industrial market experienced a 15th consecutive quarter of positive absorption — as the last nine quarters averaged 1.5 million sf each — and appears to have stabilized, according to Commercial Gateway.
Vacancy overall is up slightly from second quarter 2013 to 7.3 percent, compared to 7.2 percent in 2012. Manufacturing space has the lowest vacancy of 5.5 percent.
Net absorption in 3Q 2013 totaled almost 980,000 sf, which is less than the 1.3 million sf recorded in 2Q 2013 and the 1.4 million sf recorded in 3Q 2012.
Warehouse/distribution properties recorded almost 624,000 sf of absorption in 3Q 2013, continuing a six-year trend of positive absorption and accounting for almost 3.1 million sf of absorption year-to-date.
Properties classified as warehouse/distribution represent about 72.7 percent of the total market.
Rental rates have increased 10.1 percent during the last year, when comparing 3Q 2013’s quoted, weighted average annual rental rate of $6.19 per sf to the $5.62 rate recorded in 2012. Sublease space increased slightly in 3Q 2013 to almost 2.3 million sf compared to 3Q 2012 with 1.7 million sf.
Warehouse/distribution projects account for almost 4.3 million sf, or 80 percent, of the buildings under construction. Currently, 51 buildings are under construction in 39 projects and represent about 5.3 million sf. The largest projects with multiple buildings underway are concentrated in the Northwest and Greenspoint areas and represent 75.4 percent of the space underway citywide.
Major projects include:
• Beltway Crossing Northwest
• Imperial Distribution Park
• Rampart Corporate Center
• Sam Houston Business Park
• Greenspoint Business Center.
More than 2.4 million sf in 39 properties came online during 3Q 2013. Year-to-date, 71 buildings totaling almost 5 million sf have been completed and are collectively 68.4 percent vacant.
Read more office and industrial 3Q 2013 stats at Commercial Exchange, the commercial division of the Houston Association of Realtors.