April 4, 2017
By: Jeff Venghaus, executive vice president and industrial lead, JLL Houston
While Houston’s industrial market remains quite healthy, it is in the process of normalizing following the frenetic pace of 2013, 2014 and 2015.
Case in point: First quarter leasing activity declined for the third consecutive quarter, settling at 2.2 million square feet. Demand was softer with existing tenant renewals and relocations accounting for most of the leasing activity. User demand was spread across a range of industries but was primarily sourced from third-party logistics and logistics/distribution companies.
As a result of cooling demand, availability edged up slightly in the first quarter, but remained tight as landlord-favorable conditions continued. All in all, the quarter saw 2.4 million square feet of positive net absorption driven by a mix of both preleased deliveries and move-ins.
The Southeast was the stand out submarket once again, accounting for 75.4 percent of total net absorption in the industrial market.
Looking forward, key market indicators point to steady and sustainable growth in the period ahead. The industrial pipeline remains strong with approximately 3.8 million square feet under construction, of which approximately 70 percent is preleased. The consumer goods sector is expected to continue driving demand on the warehouse/distribution side, and manufacturing activity is beginning to pick back up with some stabilization occurring in oil and gas.
Click below for full Q1 industrial market insight and statistics.
About the Author
Jeff Venghaus is an Executive Vice President at JLL, where he serves as the leader of JLL Houston’s Industrial Services group. With more than 17 years of experience, Jeff specializes in industrial end-user representation including acquisitions, dispositions, leases, build-to-suit and design-build projects. He has been named a Houston Business Journal Heavy Hitter on seven occasions and was previously named the 2010 Industrial Broker of the Year and 2004 Industrial Rising Star by NAIOP. Connect with Jeff on LinkedIn.