Construction the Main Story of Q3 Houston Industrial

Real estate firms analyzing Houston’s industrial market during Q3 2019 agreed on one thing: A lot of construction is taking place.

“Houston’s industrial market expansion continues with 4.1 million square feet of new inventory added in the third quarter of 2019, pushing the year-to-date total to 13 million square feet,” Colliers’ analysts said, while JLL pointed out that, during Q3, construction launched on eight million square feet, “driving the 13.3 million-square-foot pipeline,” the researchers noted.

CBRE researchers indicated, however, that there was enough demand for what is already on the ground and what is being built. “The Houston industrial market has reached a healthy middle ground that has benefits for both tenants and landlords,” the company’s report pointed out.

NKF researchers pointed out that Houston’s industrial market continues to be driven by e-commerce, Port of Houston activity and the petrochemical industry, with container volume at the port continuing to break records. Moving forward, NKF continued, some business economists continue to express concerns over a pending recession.

Meanwhile, Cushman & Wakefield analysts also sounded a note of caution, indicating that the market could be challenged by an oversupply of available space, as well as “a decrease in shipping activity brought on by trade disputes and lower oil prices.” Still, the firm continued, demand continues for modern facilities, while market fundamentals remain healthy.