Q3 2025 | Houston Industrial Market Report

HOUSTON - EntSun -- "Although vacancy increased due to more supply added to the market than absorbed, leasing velocity has returned, up 16% from last quarter and positioning the industrial market for continued positive performance in the quarters to come."

Danny Rice | President

Key Takeaways

• New supply continued to outpace demand in the third quarter, with 4.7M SF delivered compared to 2.7M SF of net absorption.
• Construction activity surged to 21.8M SF, representing the highest level in two years and a 52.8% increase year over year.
• Leasing activity reached 10.8M SF, rising 15.8% from last quarter and slightly up from the 10.6M SF from the same period last year.
• The overall vacancy rate edged up 20 basis points to 7.3% from the prior quarter and up from the year-ago figure of 6.7%, driven by increasing deliveries.
• Average asking rents rose to $10.62 PSF, reflecting a 2.4% increase quarter over quarter and an 11.8% year-over-year growth.
• Sublease availability at 6.2M SF has been consistently increasing, up 16.0% from the previous quarter and up 24.8% compared to the same time last year.

Houston's industrial sector is demonstrating strong fundamentals and long-term potential, fueled by accelerating construction and high-impact lease transactions – even as supply outpaces demand. Leasing activity remained strong at 10.8 million square feet, slightly above last quarter and just below the same period last year.

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The development pipeline is substantial, with 131 buildings totaling 21.8 million square feet, of which 28.1% is preleased. Construction is heavily concentrated in the Northwest and Southeast submarkets, accounting for 52.5% of all space underway. Notably, construction volume has increased consistently each quarter during the past year.

In Q3 alone, 72 buildings totaling nearly 7.9 million square feet broke ground. Key multi-building projects include Carson 288, four buildings totaling 995,893 square feet in the South; Gateway 59 in the Northeast with four buildings totaling 739,681 square feet; and TriPort 8 Logistics Park in the Southeast with five buildings totaling 881,521 square feet.

Read the full report at colliers.com/houstonresearch