Houston’s industrial market is experiencing remarkable growth as developers and companies continue to invest in large-scale projects across the region.   According to CBRE’s third-quarter 2024 analysis, Houston experienced a strong net absorption of nearly 6.2 million square feet, bringing the year-to-date total of space leased to 16.3 million square feet, a four percent increase over last year. The report also highlighted a rise in industrial supply, with an additional 3.3 million square feet delivered during the quarter.  Click to expand The southeast submarket was the most active for new developments, with 3.8 million square feet under construction and a 24.6% prelease rate. A key contributor to this growth was Palmer Logistics, which moved into a 616,700-square-foot warehouse facility in Baytown, increasing its distribution space to over three million square feet. The new facility is located within National Property Holdings’ AmeriPort industrial complex.  CBRE also noted that Hinter Lumber Products contributed to the market's growth by securing a 450,000-square-foot lease at Independence Logistics Park in La Porte.  Click to expand Houston’s southwest submarket is also seeing growth. Dallas-based developer Trammell Crow Company (TCC) recently broke ground on Blue Ridge Commerce Center, a 92-acre development in Fort Bend County. This project will add more than 1.35 million square feet of Class A industrial space across five buildings, with completion anticipated by next summer.  “Houston’s southwest submarket is one of the fastest growing industrial submarkets in the region and was less than five percent vacant as of the second quarter of 2024,” said George Farish of TCC in a statement. With a significant tapering of new supply, we expect the market for Class A industrial space to remain healthy heading into 2025 and beyond.”  Meanwhile, Liberty Development Partners acquired more than 1,000 acres along the Grand Parkway, doubling the size of its Gulf Inland Logistics Park in Dayton. This expansion marks the start of phase two of a three-phase development plan, which will ultimately span nearly 4,000 acres. Prologis, a global real estate giant, is also planning to add up to five million square feet of speculative and build-to-suit industrial space at its 350-acre Legacy Point property in Cypress.   Click to expand Houston’s major transportation hubs are also experiencing similar growth. Avera Companies, a Houston-based real estate firm, announced plans for Baywood Logistics, a 401,154-square-foot front-load distribution building near the Houston Ship Channel. Scheduled for completion next year, the 34-acre facility will feature access to container terminals, advanced ingress/egress capabilities and connectivity to major roadways.   Global investment firm Partner Capital has also acquired 153 acres near the George Bush Intercontinental Airport (IAH) for an industrial park development. Although still in the planning stages, the project is expected to break ground by September 2025.  Click to expand In addition to these projects, logistics companies are ramping up their presence in the region. Grainger recently broke ground on a 1.2 million-square-foot distribution center in Hockley, one of its largest facilities to date that will create 400 jobs with an expected open date in 2026. Cresset Real Estate Partners and Lovett Industrial have also secured the largest speculative industrial lease in the Greater Houston area to date with BroadRange Logistics. The company now occupies the 1.2 million-square-foot Northport Logistics Center within the Conroe Park North development.  Despite low vacancy rates last quarter, Houston’s industrial market remains resilient with strong demand and steady growth expected to continue, according to CBRE.  Learn more about Houston’s industrial market. 

Industrial parks in the greater Houston area are attracting significant new development projects and tenant companies, proving the region’s strength as a logistics hub.  TGS Cedar Port Industrial Park has announced several new industrial projects or expansions, including a new 164,000-square-foot Class-A speculative truck terminal. Dayton Street Partners made the 47.4-acre purchase at the industrial park located in Chambers County. According to a press release, the Chicago-based developer said the park’s location was key in the decision. The intermodal transportation logistics facility offers direct access to major interstates and highways, including Grand Parkway, and the Houston Ship Channel, and rail service.  “Houston has proven itself as a powerhouse logistics hub,” said Hower Wedren, Dayton Street Partners founder and managing principal, in a press release. “The opportunity to join the incredible development at Cedar Port Industrial Park and bring the very first spec truck terminal to the area is tremendous and we look forward to continued involvement in Houston’s logistics market.” The truck terminal will include a build-to-suit office, a guard shack, a 10,000-square-foot truck maintenance facility and a potential fueling station. The terminal is expected to be completed by the second quarter of 2023. Earlier this year, Article, an online furniture retailer, announced its first Texas fulfillment center at Cedar Port. The retailer’s 500-square-foot build-to-suit warehouse will join other major companies with a presence at the industrial park, including IKEA, Walmart, Home Depot and Floor & Décor.  According to the Houston Chronicle, Walmart is expanding its presence by building a new 1 million-square-foot distribution center at Cedar Port Trade Center, located within the 15,000-acre industrial park. Industrial projects are also gaining steam along the U.S. 290 corridor northwest of Houston. According to the Houston Chronicle, Pagewood recently broke ground on the Great 290 Distribution Center on 63 acres of land at the southwest corner of U.S. 290 and FM 2920 in Waller County. It will contain a 500,000-square-foot cross-dock building, which is expected to be completed in March 2023. In January, Hines acquired 78 acres for a build-to-suit project in Beacon Hill, a master-planned community along U.S. 290 near FM 362 that will include commercial, multifamily and retail across 564 acres. According to the developer Wolff Companies’ website, the 290 corridor “supported by an excellent school district and the business-friendly climate in the City and County of Waller” sets the region up for “decades of high-quality growth and development.”  According to figures from CBRE’s analysis of the second quarter of 2022, Houston broke records for the highest second quarter absorption the industrial market has experienced in 20 years, coming in with 7.8 million square feet of positive absorption. It also found that market-wide vacancy rate decreased for the fourth consecutive quarter, reaching 4.4%. The most active submarkets for building activity were the Northwest, with 7.6 million underway and a total of 23.4 million citywide in the pipeline. CBRE predicts another “strong year” for industrial activity and manufacturing in Houston as companies onshore their operations to avoid supply-chain disruptions.  Learn more about what makes Houston an ideal location to distribute goods around the country and the world.