Commercial Gateway, the commercial arm of the Houston Association of Realtors, reports net sales and leases of more than 2 million square feet of industrial space between January 1 and the end of March. That’s more than double the rate of absorption during the same period in 2013.
Overall vacancy is down to 6.5%, the lowest on record in recent years. Tom Lynch is with the Houston office of CBRE.
“Rental rates continue to either hold strong or they gradually increase. We are now seeing bumps in annual rents on longer-term leases. Typical on a five-year lease, now, you’ll see annual rent bumps of 2.5%; whereas, two and a half years ago, a five-year deal would probably have been a flat rate.”
Warehouse and distribution properties recorded the lion’s share of space taken up in the first-quarter. B&G Foods and Amazon each closed deals along the North Hardy Toll Road, accounting for roughly a quarter-million square feet apiece.
North Hardy Toll Road Google map