Glut Of Unleased Spec Development Tips Market Tenant Friendly
Houston’s industrial market has seen meteoric growth over the past two years as the market shifted from primarily energy-related, crane-served manufacturing space towards logistics and e-commerce distribution space. Demand for space supporting local distribution centers has ramped up, especially since the second half of 2018.More recently, absorption of new spec development properties has slowed. With the economic impact of COVID-19, we are now seeing developments nearing delivery with no tenants to move in, and under construction projects being put on hold.
The top logistics and distribution lease signed again belonged to Amazon, signing a 443K SF lease in the NW and Wholesome Sweeteners signing a lease for 349K SF on the East side. Development remains focused in the East as well as along I-45 North and Hwy 290 in the Northwest. Despite a recent slowdown in construction starts, the construction pipeline remains at a near record-high 17.7M SF.
