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Houston industrial market slows as economic uncertainty continues
Rising interest rates and looming recession concerns have tapered the activity the Houston industrial market has seen over the past few years. For 2023, leasing has decreased approximately 25% compared with 2022. While construction starts have slowed, the underconstruction pipeline remains high at 23.9 million square feet (msf), although, with approximately 7.5 msf of space delivered this quarter, the pipeline has decreased compared with the prior quarter. Vacancy has increased due to the new supply coming online, coupled with the observed decrease in leasing. Given that the majority of the under-construction activity is speculative development, it is likely that vacancy will continue to increase as new projects are delivered.