First Industrial Realty To Increase Houston Presence With 425K SF Speculative Warehouse
First Industrial Realty Trust is planning a $25M, 425K SF speculative warehouse with office space in northeast Houston, according to a state filing.
The building at 8151 Liberty Road, off the North Loop, is set to offer 425K SF of warehouse space and 2,500 SF of office space, according to the filing with the Texas Department of Licensing and Regulation. These filings are often preliminary and subject to change.
The filing indicates construction will begin in February 2024. This project would be Chicago-based First Industrial Realty’s fifth building in the Houston market, increasing its presence in Houston by more than 40%, The Real Deal reported.
First Industrial Realty’s vacancy rate is about 2% across its portfolio, well below Greater Houston’s industrial vacancy rate of about 7%, according to the article.
Houston’s northeast submarket already had about 3.8M SF under construction, according to JLL’s Q2 industrial report.
The city's industrial absorption remains relatively strong — Houston’s total net absorption of 10.2M SF at midyear has already surpassed the pre-2020 annual average. But experts predict the hot industrial building cycle will cool down within the next year.
“We're going to see that record construction activity that we had in the first quarter really start to come down and help us kind of rebalance the market looking ahead and moving into 2024,” Rachel Alexander, director of research for JLL in Houston, previously told Bisnow.
Overall, Houston has about 27.5M SF of industrial projects under construction, according to the JLL report. Like the First Industrial Realty project, most of that square footage — 19.6M SF — is speculative.
But with 4.7M SF of net absorption in Q2, according to the JLL report, it’s evident that speculative projects are finding success. For instance, Stream Realty this month fully leased its speculative, 156K SF Raceway Northwest Distribution Center to KHD Group, a furniture vendor and supplier that started its business with the Vecelo brand.
