Jan. 13, 2016
Houston closes 2015 and begins an uneasy 2016
Despite early fears of a slow year, Houston’s industrial market performed well in 2015, according to the latest Houston industrial report from JLL Research. The Impact from oil and M&A activity was isolated to the manufacturing side as several oil-field services companies closed secondary facilities to reduce costs. The industrial distribution market, however, did not flinch at $40 oil. The overall well-performing industrial market saw rents stabilize in 1st generation/Class A buildings because of new delivery and competition, leading landlords in 2nd generation/Class B buildings to push rental rates by 10-25 percent due to the lack of competing inventory. As a result, 2016 could see a flight to quality as tenants that have historically enjoyed the lower rent that class B buildings offer may be able move to class A options for only a slight premium. The last 3 months of 2015 for the Houston industrial market capped a declining 12 month period in terms of absorption with less than one tenth of the 8.5M SF of new growth taking place from October to December. Houston’s industrial market will need a combination of increased leasing activity and a halt to new projects in order to bring the market back into balance in 2016.
JLL is pleased to present its Q4 2015 Houston Industrial Market Reports. To view the reports, please click the links below.