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Houston's Industrial Q2 Picks Up 2M-SF Gain

HOUSTON-Last year's industrial scene was dominated by users/owners buying or building, thanks in part to low interest rates. For the last three to six months, more tenants have been signing leases in the race for space, driving a second consecutive gain.

By Bonnie Grota | Updated on July 20, 2004

HOUSTON-The local industrial market of 365 million sf has garnered 1.8 million sf of positive net absorption during the second quarter. Year-to-date absorption total has increased to nearly 2.8 million sf, according to the latest report by Grubb & Ellis Co.’s Houston team.

It’s the second consecutive quarter for the industrial market to surpass the one-million-sf mark in positive absorption and the highest gain since first quarter 1998, says Ariel Guerrero, Grubb & Ellis’ research services manager. In comparison, 1.2 million sf was absorbed in 2003. “Leasing has picked up in the last three to six months as firms decide to expand as they see their corporate profits improving,” he says. “We now see tenants gearing up for the recovery phase of the market.”

Warehouse and distribution space contributed to the big gain by registering a growth of nearly 1.3 million sf while R&D/flex space grew to 456,203 sf in the second quarter. The majority of the growth occurred in the northwest far submarket. The northwest ended the quarter with 631,252 sf absorbed, of which 395,905 sf came from Flooring Services of Texas LP, Arizona Tile, the Laminate Store International, Denver Southwest LP and Source Logistics.

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