HOUSTON-CBRE's Q2 2013 Texas Industrial MarketView report shows an extraordinarily healthy industrial sector throughout the Lone Star State. The industrial sector is so healthy, in fact, that it's tilting in favor of the landlord.
Vacancy rates throughout Texas are reflecting tightening supply: In Houston, occupancy is 95%, with Dallas-Fort Worth showing that 92% of its industrial product is occupied. San Antonio's occupancy is 90%
Coupled with all of this is a 6.5% unemployment rate (compared to the 7.3% reported nationwide) and the fact that Texas is the second largest exporter to China (according to 24/7 Wall Street).
And, unlike other post-recessionary periods during which single-digit vacancies have led to construction, the CBRE report points out that developers are being more cautious than they were in previous recoveries. Twenty million square feet are under construction in the major Texas metros, which is close to three times the 6.8 million square feet of construction reported at the end of Q2 2012. Furthermore, companies are leasing more space, meaning higher rental rates and fewer concessions and tenant improvement allowances.
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