HOUSTON-Though the entire metro area is considered "boom town" when it comes to Texas commercial real estate development, the southeast submarket – most notably, the Port of Houston area – has been somewhat lagging behind. According to a recent report issued by Jones Lang LaSalle, the distribution and manufacturing centers in the port area have a vacancy of 60.3%, with no plans for future deliveries.

Part of the reason for the rather dismal vacancy is due to overbuilding before the Great Recession. Industrial space in this particular submarket is slow to be absorbed. The JLL report notes the following:

• Despite a high percentage of institutional ownership, investment activity has tended to be light, driven recently by corporate users and private local investors.
• Manufacturers make up nearly a quarter of current tenant demand.
• Nearly half of the total square footage leased is by tenants who occupy more than 250,000 square feet.
• Half of the inventory near Barbour's Cut Terminal was built during the past decade.

This doesn't mean the port itself is idle, however. The anticipated widening of the Panama Canal has led the Port Authority to commit $206 million in capital improvement projects over the next few years.

The money will be used on the following projects:

• Approximately $146 million will be allocated to Houston's container terminals for continuing development of Bayport and modernization at Barbour's Cut.
• Additionally, $5.0 million has been reserved for maintenance dredging and other related improvements.
• Approximately $500,000 is reserved for constructing a westbound bypass lane that will provide two dedicated, right-hand turn lanes for container trucks leaving Bayport.
• The Houston Port Authority has approved a project to deepen the shipping channel to 45 feet and widen it to 530 feet, while using the dredged material to create approximately 4,250 acres of wetlands in Galveston Bay.