HOUSTON – (Realty News Report) – Eighty-five industrial buildings, totaling 11.9 million SF are under construction in Houston and slated for 2019 completion.
“Most of what is being built is absorbed as fast as it’s being built,” said Patrick Duffy, president of Colliers International, speaking at the Colliers’ Houston Trends 19 event at the Houston Country Club last week.
Although construction has been brisk, the average citywide industrial is 5.5 percent, Colliers reports. Construction is expected to remain strong for a while.
Industrial vacancy is the lowest in the east/northeast market, Colliers reported. Two large new distribution projects are coming online in the North Hardy Toll Road Corridor – a 727,600 SF property for Grocers Supply and a 656,700 SF facility for Conn’s Home Plus.
Overall, the Houston market is in good shape, Duffy said, although the city’s average Class A vacancy hit 21.1 percent. But Houston had positive office absorption in the fourth quarter and the sublease supply is gradually dwindling.
Duffy said West Texas Intermediate oil prices have hovered in the $50 a barrel range and that price point allows almost all firms to operate profitably. The Permian Basin of West Texas has almost 500 rigs operating currently, which is about 40 percent of the rig count total for the nation. The Permian Basin is one of the world’s richest oil plays.