E-Commerce Boom: 389 Acres Under Roof Now Under Construction in Houston Warehouse Surge

HOUSTON – (Realty News Report) – Developers are on a construction binge in Houston, building warehouses to handle consumer demand coming from online shopping and other business activity.

A significant number of big distribution buildings are being built  – a total of 16.9 million square feet, or  about 389 acres under roof, according to a third quarter report from the Cushman & Wakefield commercial real estate company.

“Demand for industrial space has been steady, fueled by an uptick in online shopping. As E-commerce spending continues to grow, companies are seeking space to fulfill demand leading up to the holiday season,” said Allison Bergmann, an industrial broker in the Houston office of Cushman & Wakefield.

E-commerce giant Amazon has several new distribution buildings around Houston, part of an effort to build 1,500 new warehouses around the nation. With a twist of irony, Amazon has reportedly been in discussions to take over empty retail spaces in regional malls – a move that punctuates a trend of traditional bricks-and-stick retail faltering as e-commerce gains market share. The coronavirus pandemic has accelerated the rise of e-commerce as many consumers stay home.

Big box retailers have also required additional warehouse space iin the Houston area. For example, Dollar Tree Inc. recently completed  a 1.2 million SF distribution facility in Rosenberg on Spur 10 in Fort Bend County, about 40 miles southwest of Houston.

The e-commerce demand has also created demand for refrigerated warehouse space because delivery of groceries and meal preparation kits is expanding. Ti Cold Development just announced it is developing a 304,000-SF cold storage facility in north Houston near the George Bush Intercontinental Airport in the East Hardy Commerce Park.

Overall, during Q3 2020, 6.3 million SFof industrial space was delivered, bringing year-to-date completions to 21.83 million SF, Cushman & Wakefield said.

Major tenant move-ins during the third quarter include:

Katoen Natie for 604,800 SF in the southeast; American Furniture Warehouse for 897,700 SF and Wholesale Sweeteners for 349,050 SF, Cushman & Wakefield said.

In the Houston area, the overall vacancy rate was 10.6 percent, Cushman & Wakefield said.

“After a slow start to 2020, and an unprecedented pause in activity due to the pandemic, the velocity of active deals picked up in June while many of these new requirements are just now crossing the finish line,” said Jim Foreman of Cushman & Wakefield. “We look for absorption to be even better in the 4thquarter, rounding out a better than expected year for both leasing volume and absorption.”

Oct. 27, 2020 Realty News Report Copyright 2020

File: E-Commerce Boom: 389 Acres

File: Cushman & Wakefield. Rosenberg . Houston.    E-Commerce Boom: 389 Acres of warehouse space under construction. Industrial market.

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