Houston Industrial Investment Forecast
Plethora of Tailwinds Propel Industrial Performance;
Well-Capitalized Buyers Target Transport Hubs
Port of Houston and rising energy costs drive leasing boom. Houston's economic momentum has been robust with the population growing almost three times as fast as the U.S. and the median household income rising at the quickest pace of the major Texas markets last year. Additionally the expanding e-commerce segment in concert with global supply chain uncertainty has led firms to emphasize keeping goods closer to consumers. Heightened e-commerce sales have also led the Port of Houston to report a rise in activity in 2021 pointing toward continued tenant interest for industrial space in 2022. Supporting the expanding customer pool in Houston and South Texas has required firms to grow local footprints driving net absorption over 27 million square feet and producing a 160-basis-point drop in vacancy in 2021. Beyond distributors the energy sector facilitates additional demand in Houston. With oil prices climbing to the highest level since 2008 energy producers are expanding rig counts and operations in the metro.