Houston Industrial Market Report | Q2 2025

HOUSTON - Rezul -- As we move into the second half of 2025, Houston's industrial market remains active, with construction activity surging 84% year-over-year, providing a strong indicator of renewed developer confidence. Net absorption rose to 2.1 million square feet, while new leasing totaled 7.7 million square feet.

With continued growth in both Port of Houston traffic and the region's population, market fundamentals remain solid, positioning Houston for a positive finish to the year.

Danny Rice | President

Key Takeaways

• Construction activity accelerates
• Vacancy stable
• Absorption, deliveries up
• Sublease availability rises

Houston Highlights
New supply continued to outpace demand in the second quarter, with 3.8M SF delivered compared to 2.1M SF of net absorption. Construction starts totaled 18.8M SF, representing an increase of 16.0% quarter over quarter and a significant 77.0% year over year. Leasing activity reached 7.7M SF, declining 29.5% from the first quarter and down 35.2% from the same period last year. The largest lease of the quarter was Foxconn's 417,360 SF at 8228 Houston Avenue; the firm leased another 184,320 SF at 8118 Houston Avenue for a combined 601,680 SF total, both buildings in Innerbelt Northwest Logistics Park. Also, Foxconn purchased four buildings with 1.0M SF in Fairbanks Logistics Park. The overall vacancy rate edged up 10 basis points to 6.9% from the prior quarter but remains below the year-ago figure of 7.3%. Average asking rents rose to $10.31 PSF, reflecting a 5.5% increase quarter over quarter and 8.9% year-over-year growth. Sublease availability at 5.5M SF climbed 12.8% from the previous quarter and is up 17.1% compared to the same time last year.

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Read full report at colliers.com/houstonresearch