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Texas  + Houston-Galveston  + Industrial  | 
Cedar Port Industrial Park

Y-O-Y Industrial Occupancy Gain of 500M SF Sets Record

The U.S. industrial market set new records across multiple key performance indicators, according to Transwestern’s third quarter U.S. industrial market report. More than 540 million square feet of net absorption was reported in the last four quarters, making it the first time in history that occupancy has increased by more than 500 million square feet year-over-year. And, the third quarter had net absorption of 158.8 million square feet, the largest quarterly growth since 2008.

Asking rents increased to $7.11 per square foot in third quarter, with more than one-third of the 44 tracked markets reporting double-digit percentage growth year-over-year. It marked the first time the average asking rent for U.S. industrial space surpassed $7.00 per-square-foot, increasing from $6.98 per-square-foot during the previous quarter.

“We expect continued elevated net absorption as preleased construction projects are delivered to the market,” said Matthew Dolly, research director at Transwestern. “Further, the boost in rents is making redevelopment opportunities more feasible, which will benefit both core and expanding markets such as Savannah, Austin and Pennsylvania’s Lehigh Valley.”

As for Houston, industrial growth – driven by retail sales and an expanding population base – is a bright spot after the economy finds its footing following 18 months of the pandemic. The industrial market’s leasing trajectory is expected to reach an all-time absorption peak during 2021 which so far exceeds 24.7 million square feet this year, according to Transwestern.

Construction is also chalking up durable market indicators. In the recent reporting period, Houston had three sizeable warehouse/distribution completions and closed out the quarter with more than 14.1 million square feet underway. Amazon added Houston to its list of just a dozen U.S. markets now offering same-day delivery for Prime members by opening a 100,000-square-foot facility in Pasadena, TX.

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Matthew Dolly

About Lisa Brown

Lisa Brown has decades of experience in corporate communications and marketing management with organizations including Coldwell Banker Residential, Grubb & Ellis, Marcus & Millichap, NAIOP, SIOR and ALM. In those positions, she worked in conjunction with chief executive officers and chief marketing officers to create corporate messaging, cohesive branding standards, strategic marketing plans and thought pieces. Brown is a frequent speaker at industry events and an editing adjunct professor for an online course. She has a master’s degree in mass communications from San Jose State University.

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