The Partnership sends updates for the most important economic indicators each month. If you would like to opt-in to receive these updates, please click here.
Estimated Reading Time: 1 minute.
Demand for industrial and warehouse space in Houston has fluctuated over the past several years. The vacancy rate fell to a five-year low of 5.0 percent in Q4/22 amid strong absorption and record construction activity. As new supply continued to outpace demand, vacancy trended upward, reaching a new cycle high of 7.4 percent in Q4/25, edging above the prior peak of 7.3 percent in Q3/25.
Net absorption in Houston’s industrial market continued to moderate from the elevated levels seen in ’24. In Q4/25, net absorption totaled 3.6 million square feet, up from 3.0 million square feet in Q3/25 but still below the pace recorded earlier in the cycle. The moderation reflects softer tenant demand amid continued new supply additions.
At the end of Q4/25, Houston had 83.7 million square feet of industrial and warehouse space listed as available, up from 81.5 million square feet in Q3/25. This total includes vacant, sublet, and soon-to-be-vacant space, as well as occupied space currently being marketed for lease.
Higher interest rates, tighter lending standards, and softer absorption have slowed building activity in Houston’s industrial market. As of Q4/25, 26.1 million square feet were under construction, reflecting a modest rebound since mid-‘24 but remaining well below the cycle peak of 36.6 million square feet in Q4/22.
Despite softer absorption, industrial rents in Houston continue to rise. The average triple net (NNN) rent reached $10.67 per square foot in Q4/25, up from $9.41 in Q4/24 and $9.20 in Q4/23. Under NNN lease terms, tenants cover expenses such as property taxes, maintenance, utilities, and security. Over the past five years, rents have increased about 41 percent, underscoring steady demand for quality space even in a more cautious leasing environment.
Prepared by Greater Houston Partnership Research
Leta Wauson
Research Director
Greater Houston Partnership
[email protected]
