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Supply balancing out demand. Nearing the end of the first quarter, the vacancy rate dropped 20 basis points to 5.4%, compared to this time last month at 5.6%. Occupancy of the 2.1 million sq. ft. delivered to the market year-to-date stands at 81%, and of the 7.0 million sq. ft. currently under construction, 64% is available for lease. Year-to-date net absorption totals 1.1 million sq. ft., in addition to 350 deals representing 3.7 million sq. ft. of leasing activity.
Former Randalls facility sold. Real Capital Analytics reports industrial sales volume in the Houston area at $104.8 million year-to-date. So far this year, the buyer composition is made up of 87% private investment capital. A recent top transaction is the acquisition by Crow Holdings Industrial of the former Randalls warehouse and distribution center, made up of 398,000 sq. ft. of grocery/dry space, 119,500 sq. ft. of refrigerated space, and 113,200 sq. ft. of freezer space, totaling 700,644 sq. ft. Randalls’ parent, grocery giant Albertsons, put the 70.24-acre property at 10700 Telge Road on the market in 2017.
Job growth stronger than estimated. The revised Bureau of Labor Statistics Houston employment in 2017 estimate shows that job growth increased 1.9% year-over-year from December 2016, or about 57,800 jobs. This is in comparison to the previous early estimate of 1.4% reported at the end of January. The biggest job gains were in professional and business services (23,000) and trade, transportation and utilities (11,300), followed by construction (8,000), which surged at the end of the year due to post-Hurricane Harvey rebuilding.
Director of Research
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