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Demand for industrial and warehouse space in Houston has fluctuated over the past several years. The vacancy rate fell to 5.0 percent in Q4/22, the lowest level recorded during the five-year period shown, amid strong absorption and elevated construction activity. In Q3/26, the vacancy rate increased to 7.5 percent from 7.2 percent in the previous quarter, reaching its highest level in the five-year period as industrial inventory continued to expand.

Net absorption in Houston’s industrial market declined from 7.3 million square feet in Q2/26 to 5.3 million square feet in Q3/26, though it remained above the 3.4 million square feet recorded in Q3/25. The slowdown suggests more moderate demand compared with the previous quarter, while elevated availability continues to provide tenants with ample space options.

At the end of Q3/26, Houston had 86.7 million square feet of industrial and warehouse space listed as available, down approximately 1.0 million square feet from 87.7 million square feet in Q2/26. Available space includes vacant, sublet, and soon-to-be-vacant properties, as well as occupied space currently being marketed for lease. Despite the decline in available space, the vacancy rate increased during the quarter, suggesting that market conditions remain mixed.

Industrial construction declined in Q3/26, with 26.7 million square feet underway, down from 28.6 million square feet in Q2/26. The decrease follows three consecutive quarters of expansion, though the pipeline remains below the five-year high of 36.3 million square feet recorded in Q4/22.

Average industrial triple-net asking rent increased to $11.05 per square foot in Q3/26, up from $10.38 in Q2/26 and $10.34 in Q3/25. Under NNN lease terms, tenants are generally responsible for expenses such as property taxes, maintenance, utilities, and security. Average asking rents have risen approximately 42 percent over the past five years, reflecting continued upward pressure on industrial rental rates.

Prepared by Greater Houston Partnership Research

Leta Wauson
Research Director
Greater Houston Partnership
lwauson@houston.org