Houston Industrial Deliveries Reach New Highs

Houston’s construction and deliveries have reached new highs. JLL’s new Q3 Houston industrial survey reports that construction activity reached a record high of 22.5 million square feet, 74.2% speculative, as developers moved forward on projects capitalized before financial markets shifted. 

At 6.4%, vacancy remained 200 basis points below Q3 2021. Net Absorption climbed to 21.6 million square feet year-to-date following the 7.1 million square feet of occupancy gains this quarter. The pace of leasing activity continued, with strong competition for space driving 11.4 million square feet in Q3 deal volume.

JLL’s outlook for the future; construction activity will likely stay elevated in the coming quarters, with several new business parks poised to break ground, and deliveries are expected to remain heavy over the next 12 months, but supply should tighten heading into 2024 given the difficulty to capitalize new deals in the current investment climate.