Houston remains one of the top-performing industrial markets in the U.S., with net absorption averaging 15% above pre-pandemic levels over the past year. Vacancy has stabilized just below the national average for the first time in nearly a decade, driven by steady demand from logistics, manufacturing, and e-commerce users.
Leasing remains strong though new supply continues to pressure the big-box segment. Over the past five years, inventory has grown by nearly 20%, and another 19 MSF is under construction, most of which remains unleased. Most of it consists of 100,000+ SF buildings concentrated near Beltway 8 and the Port.
Development is beginning to slow. Groundbreakings in 2024 and early 2025 are tracking well below peak levels, as high costs and tighter lending standards are make many deals unfeasible.
Rent growth has decelerated to 1.8% year over year—the slowest pace since 2016. However, small-bay and infill spaces continue to outperform, with minimal new supply and strong local demand. Meanwhile, concessions have increased on larger footprints, giving tenants more leverage than in recent years.
For tenants, today’s rising concessions and slower rent growth offer a window to lock in favorable lease terms—before tightening supply and steady demand potentially push rents higher as the market rebalances.