Posted Oct 14, 2025, 1:14 PM
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FYHA
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Join Date: Oct 2007
Location: Houston - Wichita, KS
Posts: 3,509
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https://www.bisnow.com/houston/news/...-supply-131327
Quote:
'The Little Engine That Could': Houston Industrial Demand Keeps Eating Up New Supply
October 10, 2025 | 5:20 p.m. ET
Maddy McCarty, Houston
A 420K SF distribution facility in Baytown secured a full-building lease prior to its construction completion, helping fuel Houston’s best quarter for industrial leasing activity since 2023.
The lease with Supply Chain Management filled the DC 9 building, expected to deliver in March at TGS Cedar Port Industrial Park. Along with the lease, developer TGS Cedar Port Partners broke ground on DC 10, an almost identical building slated to deliver in the second quarter.
Analysts say this activity is reflective of healthy demand in Houston’s industrial market, which is supported by a strong labor force, population growth and the heavily trafficked Port Houston. After more than 35M SF of industrial space was delivered in 2023, development has leveled out but not fallen off.
“In 2023 we had a record year of deliveries, and I don't think anybody expected Houston to eat through that new development so quickly,” said Allie Zepeda, senior research analyst for JLL.
At the time, supply was far outpacing demand, pushing vacancy rates up. Now Houston has seen about 13M SF of supply delivered this year. Another 17M SF is under construction, with 34% preleased, according to JLL’s third-quarter report.
Vacancy inched up 50 basis points, but 11.8M SF of leasing activity and even more expected in the fourth quarter signal a balanced market.
“We continue to be in a healthy place, with our vacancy at 6.8%,” Zepeda said. “It's still below our long-term average of 7%.”
The quarter’s leasing activity was led by PepsiCo expanding to 1M SF at I-10 West Trade Center in Brookshire, according to the JLL report. Food, beverage and retail distributors often tie to population growth, JLL Texas Research Director Rachel Alexander said.
“So it's no surprise that [PepsiCo] went out to a Katy location where it's very easy to distribute to Austin or San Antonio and also be near the population density that's out there,” she said.
Supply Chain Management, the tenant that preleased the DC 9 building, is a third-party logistics company that will benefit from TGS Cedar Port Industrial Park’s direct barge and dual-rail access, according to a press release. The park has a barge dock, capacity for more than 5,500 rail cars and another 1,000 rail car spaces under development.
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