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70 Industrial Buildings Under Construction in Houston Due to Energy Boom

HOUSTON – Seventy industrial buildings are under construction in Houston, where a continued expansion in the energy industry has driven up warehouse rents significantly in the last year.

“Houston’s industrial market remains one of the healthiest in the U.S. primarily due to continued expansion in the oil and gas industry.  It has accelerated Houston’s job growth, increasing demand for housing and home building supplies,” says the third industrial market quarter report by Colliers International.

Houston added 119,000 new jobs in the 12-month period ending in September to lead the nation.

“A significant part of the industrial leasing activity is tied to suppliers entering the Houston market or expanding existing facilities. Texas is expected to produce more oil and gas than all but one of the OPEC nations in 2014 due to the booming Eagle Ford Shale and Permian Basin plays in Texas, and Houston’s industrial real estate market will benefit from that rapidly increasing production,” Colliers says.

Houston’s average industrial vacancy rate decreased to 5.1 percent in the third quarter 2014, down from 5.3 percent a year ago, Colliers said. The citywide average quoted industrial rental rate was $6.09 per square foot, up 3.6 percent from $5.86 per square foot a year ago.

In another report, CBRE reported 70 industrial buildings with 6.1 million square feet of space are under construction in Houston.

“Significant job and population growth in Houston are fueling demand for consumer and construction-related goods and the need for additional industrial space. Strong demand has kept construction active with 70 buildings and 6.1 million square feet of projects underway,” said Faron Wiley, CBRE First Vice President.

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