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Market activity. The vacancy rate stood at 5.6% midway through the first quarter, with deliveries at 1.3 million sq. ft. There is 7.0 million sq. ft. currently under construction, with about 30% of that space occupied. Year-to-date net absorption totals 110,089 sq. ft., while leasing activity has tallied a healthy 3.1 million sq. ft.
Sales Activity. Real Capital Analytics reports industrial sales volume in the Houston area at $79.6 million as of the end of January, resulting in a year-over-year change of -62.0%. So far this year, the buyer composition is made up of 87% private investment capital. A recent top transaction is the acquisition by Sealy & Co. of Sam Houston Business Park, a four-building 262,631-sq.-ft. industrial park at 8844 N. Sam Houston Parkway W., from Levey Group.
New distribution space in Humble. Park Air 59 will contain up to 700,000 sq. ft. of Class A distribution space on 38 acres with cross-dock configuration and plenty of trailer storage. The industrial park is located at the northeast corner of Will Clayton Pkwy. and US 59, built in response to the continued demand for big-box distribution centers. The Northeast submarket currently has a vacancy rate of 3.1% for Warehouse/Distribution space.
Houston Purchasing Managers Index. The PMI registered 54.8 in January, up from 54.5 in December. Readings above 50 signal economic expansion over the next three to four months, and below 50 signal contraction. The region’s PMI slipped below 50 in the three months immediately following Hurricane Harvey but climbed above 50 in November. January’s 54.8 reading is the highest since October 2014, when the PMI registered 58.5.
Director of Research
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