Negative perception of Houston economy ‘an issue’ for industrial space landlords

HoustonBusinessnews47Thanks to consumer perception that the Houston warehouse space market is not doing so well landlords are having to give more tenant concessions to get deals done.  The oil and gas industries are in a slump however that does not mean that warehouse space leasing activity is not high.

Overal Industrial space leasing in Houston is very robust however in the oil and gas manufacturing space where they need crane-ready buildings tenant demand has declined.

Average rental rates for Houston manufacturing space is around $0.68 sf which is below market.  New warehouse construction is strong with about 11.2m under construction right now.  Warehouse subleases were at an all time in Q1 2016 however this quarter is down to 3.3 million sf.

As the market evolves tenants are looking for shorter lease terms and extensions

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