HOUSTON – (Realty News Report) – Houston’s industrial market surged in 2020 as e-commerce boosted the demand for warehouses and construction boomed.
For the year, some 12.2 million SF of industrial space (some 280 acres under roof) was filled in the Houston area in 2020, according the Cushman & Wakefield commercial real estate firm.
“Despite a temporary pause on activity in the spring, the pandemic heightened the e-commerce boom, which resulted in strong leasing activity in the third and fourth quarters,” said Allison Bergmann of Cushman & Wakefield.
The leasing activity increase was needed because warehouse construction has been incredibly robust. In fact, many industrial market experts and analysts had been predicting that an oversupply of industrial space was bubbling up.
At year-end the industrial vacancy rate hit 10.8 percent, an increase of 90 basis points when compared to the previous quarter, Cushman & Wakefield said.
“The Houston industrial market ended 2020 strong, certainly better than anticipated given COVID-19. If first quarter leasing and absorption is robust, we could possible work through most of the excess supply that came online throughout 2019 and 2020,” said Jim Foreman of Cushman & Wakefield.
Houston’s industrial market currently has 19.4 million square feet of industrial space under construction. Development activity is focused in the following markets – Waller County (5.1 million square feet), Southwest-Far (3.6 million square feet), Montgomery County (3.1 million square feet), and Southeast-Far (2.4 million square feet).
New projects include the 1.2 million SF Boulevard Oaks Business Park logistics park in southwest Houston, located off of Beltway 8 along West Fuqua Street. Hines is the developer. The southern stretch of Beltway 8 has been booming with new construction in recent years, emerging as a significant market.
Notable leases signed during fourth quarter include:
- Lowe’s Distribution Center, 1,500,000 million square feet, Montgomery County
- Amazon, 1,000,000 million square feet, Southwest-Far
- Dunavant Distribution Center, 784,000 square feet, Southeast-Far
- Home Depot, 657,600 square feet, Northwest-Far
- Pioneer Technology, 404,160 square feet, Southeast-Far
- Texas Tissue, 402,300 square feet, Montgomery County
Jan 14, 2021 Realty News Report Copyright 2021
File: Houston’s Warehouse Boom
Caption: Boulevard Oaks Business Park. Courtesy: Hines
File: (2) 19.4 million SF under construction in Houston’s Warehouse Boom. Cushman & Wakefield.