• Leasing volume reached 10 million s.f. in Q3, bringing the year-to-date total to 31 million s.f.
• Consistently high demand resulted in 9.5 million s.f. of quarterly net absorption, a figure which matches the 10-year annual average
• Total vacancy declined for a third consecutive quarter and fell to 8.6%
• Deliveries for the quarter hit 8.1 million s.f. and were 83.2% preleased due to owner-user and build-to-suit completions
Houston’s industrial market continued to move at a rapid pace with another strong quarter of demand. Leasing activity was led by Chewy.com’s entry to Houston with a 690,000-s.f. deal at Northpoint 90 Logistics Center and an expansion in the market by an e-commerce user for 629,186 s.f. at Prologis Presidents Park, both of which were build to suits. Four consecutive quarters of robust leasing volume led to a flurry of move-ins from both a new and expanding tenant base, largely in first-generation product. Notable completions included a 1.5-million-s.f. build to suit for Lowe’s in New Caney, 1.9 million s.f. across two projects for an e-commerce company in the Southwest and 1.3 million s.f in two buildings in the North and Northwest submarkets for Home Depot. These companies, among many others, drove Q3 net absorption to 9.5 million s.f., and this momentum is expected to continue through the final quarter of the year. Given the volume of occupancy gains, vacancy dropped 40 basis points quarter-over-quarter to 8.6%. Demand is ahead of supply year to date, a trend which should carry through the close of 2021. Construction activity decreased 15.5% to 11.9 million s.f. despite 5.6 million s.f. of new groundbreakings. Rising materials costs and supply chain issues are still causing some delays, but several new building parks are poised to break ground in early Q4, and even more are in permitting and design phases for early 2022. Additionally, the flight to quality and appetite for new construction are driving an increase in asking rents across the metro. Click to read more at www.us.jll.com.