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HOUSTON-Recent demand for industrial space has led to low vacancy rates and stepped-up construction from one end of the city to the other. And with the interest from investors and tenants, local experts caution about possible overbuilding, particularly in the far northwest.

In its latest report, Grubb & Ellis Co.'s local research team says the far northwest's vacancy is 5.3%. The metro's average vacancy is 5.8% or 22.3 million sf, the lowest it's been in seven years in the 381.7-million-sf inventory. In the far northwestern tier, its 72.3-million-sf base has 3.8 million sf sitting empty.

"Three years ago, within that submarket, the vacancy rate was around 11.5%," says Ariel Guerrero, client services manager for Grubb & Ellis' local office. "A lot of that has been attributed to logistics companies coming into the area."