- Houston industrial tenants signed 14.7M SF of leases over 50,000 SF in Q3, the strongest quarter in three years, bringing year-to-date leasing to roughly 32M SF.
- Absorption totaled 14.2M SF from April through September, the best consecutive-quarter run since late 2022, and vacancy fell to 6.3%.
- Construction totals 18.4M SF across 90 projects with 31% pre-leased, and CBRE warns that financing costs and elevated Treasury yields remain the main headwind.
Houston’s industrial market is posting its strongest leasing activity in years, according to CBRE’s third-quarter market report.
Signings of more than 50,000 SF reached 14.7M SF in the three months through September, a level CBRE called “staggering.”
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Best Quarter in Three Years
The third quarter was the market’s best in the past three years. Year-to-date leasing now stands at roughly 32M SF.
TAS took a total of 751,000 SF in the South submarket, one of the moves CBRE noted.
Absorption Tops Last Year
Absorption from April through September was 14.2M SF, the strongest consecutive-quarter run since the second half of 2022. The Southeast submarket recorded the strongest Q3 absorption at 2.3M SF.
Year-to-date net absorption is 18M SF, ahead of the 15.8M SF recorded through the same point in 2025. That absorption keeps pushing down the vacancy rate, which CBRE puts at 6.3%.
Supply Pipeline Grows
Developers delivered 4.90M SF in the quarter. Another 18.4M SF is under construction across 90 projects, up modestly from Q2.
Pre-leasing stands at 31%, which CBRE said is up about 11% from the prior three months. The added supply is something to watch as it delivers, since it could pressure fundamentals.
Why It Matters
Absorption is running ahead of last year and vacancy keeps falling, which tightens the market. The growing pipeline fits a wider trend, as CRE Daily reported when industrial pipelines rebuilt and the Midwest led lease-up.
The bigger risk is financing. CBRE says the Middle East war, persistent inflation and Treasury yields in 5% territory are likely a new reality the market must contend with, as Treasury yields keep lenders on alert.
What’s Next
CBRE warned the final months of the year could prove pivotal. If Houston’s industrial players can withstand the elevated rate environment, the fundamentals look strong after a booming third quarter.
