2024 News Archive

The Houston Industrial market consistently grapples with a supply and demand imbalance, as evidenced by 1Q24 where 6 million SF of new product outpaced the absorption rate by 60%, which stood at 2.4 million SF. With 16 million SF still under construction, the supply wave shows no signs of waning, with nearly 70% of it available for lease. Despite the significant outpacing of absorption by new product, the slowdown in new construction starts is projected to mitigate reduced absorption, fostering a more sustainable and balanced market outlook. Vacancy levels are anticipated to stabilize as a result. Even still, the industrial market remains one of Houstona€™s best performing product types.

The Houston office market is struggling to find its footing as vacancy rates climb and leasing activity slows down. The total leasing activity for 1Q24 reached 2.5 million SF, significantly lower than the long-term average of 4.3 million SF for the first quarter. The decrease in leasing activity is primarily attributed to fewer transactions being completed, possibly due to a more challenging environment regarding debt liquidity. Furthermore, in 1Q24 the construction pipeline fell short of the national development average and lagged behind numerous markets of similar size. Nonetheless, in terms of completed deliveries, the metropolitan area surpassed all its counterparts by delivering 36,497 SF. As the year progresses and tenants seek out office space, we should see leasing activity eventually increase.