- Houston industrial construction rose 7.1% quarter-over-quarter, far outpacing the US increase of 2.2%.
- 21.8M SF was underway as of Q1, with 24% of it preleased, including eight of the 12 largest projects.
- Leasing totaled 8.2M SF in Q1, with new-to-market tenants making up 30.7% of deal volume.
- Average industrial rents rose 5% in 2025 but remain well below the national average.
Industrial Momentum Continues
Houston’s industrial sector is on an upswing, recording a 7.1% rise in construction activity quarter-over-quarter, according to Bisnow. As of the first quarter, 21.8M SF was under construction, notably higher than the US average, which saw a 2.2% increase. Developers are responding to ongoing population growth, labor availability, and record traffic at Port Houston, supporting a robust development pipeline.
Preleasing and Major Projects
About 24% of Houston’s industrial space under construction is already preleased. Eight of the 12 largest projects have secured tenants. This level of early commitment reflects steady occupier demand. Grainger’s 1.3M SF distribution center in Hockley leads the pipeline. The project will deliver this quarter and create 400 jobs. It stands as the region’s largest development currently underway. Developers remain active across all industrial size ranges. They continue to build across multiple submarkets. This broad activity signals ongoing confidence in Houston’s industrial sector.
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Diverse Tenant Demand
Houston industrial leasing reached 8.2M SF in Q1. New-to-market tenants drove much of this activity. They accounted for nearly one-third of all deals.
Manufacturing led demand with 21% of leases. Logistics and third-party logistics followed closely. Retail, plastics, packaging, and energy users also stayed active. This mix highlights the market’s depth and resilience.
Competitive Rents, Strong Outlook
Average Houston industrial rents grew 5% in 2025 to 65 cents PSF monthly, but prices remain competitive compared to national averages, even as other commercial sectors face rising vacancy pressures tied to new deliveries outpacing demand in certain markets. JLL forecasts another 5% rise in rents this year as the market continues to absorb new supply.
