Houston’s industrial market expansion continues with 4.1M SF of new inventory added in the third quarter of 2019, pushing the year-to-date total to 13M SF. There are 150 buildings with 18.5M SF of space under construction, which will deliver in 2019 and the first half of 2020, no doubt pushing the overall vacancy rate higher. Only 25% of the space currently under construction is pre-leased and, if delivered today would increase Houston’s total vacancy from 6.6% to 8.3%, but historical statistics reveal that an additional 10-25% will be pre-leased before delivery. Although the third quarter of 2019 recorded an increase in vacancy, Houston’s industrial market should remain healthy, provided leasing activity remains steady.

Looking forward, approximately 2.2M SF will be absorbed by tenants with expected move-in during Q4 2019. Some of the tenants scheduled to take occupancy during Q4 include Boral Windows moving into 154,661 SF in the Northwest Near submarket, Agility Project Logistics moving into 160,000 SF in the North Hardy Toll Rd submarket and SNAPP USA occupying 134,680 SF in the East-Southeast Far submarket.