Houston’s industrial market is experiencing remarkable growth as developers and companies continue to invest in large-scale projects across the region.   According to CBRE’s third-quarter 2024 analysis, Houston experienced a strong net absorption of nearly 6.2 million square feet, bringing the year-to-date total of space leased to 16.3 million square feet, a four percent increase over last year. The report also highlighted a rise in industrial supply, with an additional 3.3 million square feet delivered during the quarter.  Click to expand The southeast submarket was the most active for new developments, with 3.8 million square feet under construction and a 24.6% prelease rate. A key contributor to this growth was Palmer Logistics, which moved into a 616,700-square-foot warehouse facility in Baytown, increasing its distribution space to over three million square feet. The new facility is located within National Property Holdings’ AmeriPort industrial complex.  CBRE also noted that Hinter Lumber Products contributed to the market's growth by securing a 450,000-square-foot lease at Independence Logistics Park in La Porte.  Click to expand Houston’s southwest submarket is also seeing growth. Dallas-based developer Trammell Crow Company (TCC) recently broke ground on Blue Ridge Commerce Center, a 92-acre development in Fort Bend County. This project will add more than 1.35 million square feet of Class A industrial space across five buildings, with completion anticipated by next summer.  “Houston’s southwest submarket is one of the fastest growing industrial submarkets in the region and was less than five percent vacant as of the second quarter of 2024,” said George Farish of TCC in a statement. With a significant tapering of new supply, we expect the market for Class A industrial space to remain healthy heading into 2025 and beyond.”  Meanwhile, Liberty Development Partners acquired more than 1,000 acres along the Grand Parkway, doubling the size of its Gulf Inland Logistics Park in Dayton. This expansion marks the start of phase two of a three-phase development plan, which will ultimately span nearly 4,000 acres. Prologis, a global real estate giant, is also planning to add up to five million square feet of speculative and build-to-suit industrial space at its 350-acre Legacy Point property in Cypress.   Click to expand Houston’s major transportation hubs are also experiencing similar growth. Avera Companies, a Houston-based real estate firm, announced plans for Baywood Logistics, a 401,154-square-foot front-load distribution building near the Houston Ship Channel. Scheduled for completion next year, the 34-acre facility will feature access to container terminals, advanced ingress/egress capabilities and connectivity to major roadways.   Global investment firm Partner Capital has also acquired 153 acres near the George Bush Intercontinental Airport (IAH) for an industrial park development. Although still in the planning stages, the project is expected to break ground by September 2025.  Click to expand In addition to these projects, logistics companies are ramping up their presence in the region. Grainger recently broke ground on a 1.2 million-square-foot distribution center in Hockley, one of its largest facilities to date that will create 400 jobs with an expected open date in 2026. Cresset Real Estate Partners and Lovett Industrial have also secured the largest speculative industrial lease in the Greater Houston area to date with BroadRange Logistics. The company now occupies the 1.2 million-square-foot Northport Logistics Center within the Conroe Park North development.  Despite low vacancy rates last quarter, Houston’s industrial market remains resilient with strong demand and steady growth expected to continue, according to CBRE.  Learn more about Houston’s industrial market. 

An autonomous rover dubbed the “layout Roomba” that marks architectural and engineering designs directly onto unfinished concrete floors is one of many examples of the innovation happening in Houston’s advanced manufacturing sector. The city boasts a thriving tech ecosystem and is considered a global manufacturing powerhouse due to its central geographic location, unparalleled infrastructure and talented workforce.  Funding is now flowing into Houston to help drive the next wave of manufacturing innovation. According to the Partnership’s 2022 Houston Tech Report, more than 900 investors have funded over 1,500 venture capital transactions in the Houston region over the last five years. Data shows that 8.6% of all VC deals are funding manufacturing projects with another 8.7% funding AI and machine learning ventures.  “I think Houston is a great place to start a company. It hosts a diverse pool of exceptional talent, a reasonable cost of living and a welcoming start-up community,” said Derrick Morse, CEO and founder of Rugged Robotics. “Houston is also home to a number of innovative companies that solve really hard and really important problems.”  Rugged Robotics, a Houston startup company founded in 2018, hopes to revolutionize the construction industry by tackling the challenge of field layout by using its small robot to create a more detailed, more accurate and faster way of doing the work. Traditionally, a construction worker must do the marking manually using tape measures, chalk lines and surveying equipment. Morse, a construction industry veteran, said he saw a need to solve a pain point in the construction industry. “By focusing on the problem, and by developing a practical solution, we’ve unlocked a very exciting opportunity” Morse said. Rugged Robotics is operating out of the East End Maker Hub, a makerspace and manufacturing center in Houston’s East End. Morse said it was a no-brainer to choose the incubator as they started growing. “The East End Maker Hub was initially attractive for two reasons,” Morse said.  “First, access to the machine tools and rapid prototyping equipment we were familiar with at TXRX, and second, flexibility.” He added that the flexibility of the leases allows the company to move into bigger spaces as they evolve. Next month will mark a year since the $38 million innovation hub opened. Urban Partnerships Community Development Corporation says the facility is 95% occupied with 49 tenants from candle making to biotech/manufacturing, a sign of a successful first year. The East End Maker Hub aims to create 1,000 new companies over the next five years to boost Houston’s advanced manufacturing jobs. Houston has one of the largest manufacturing workforces in the country with more than 213,100 workers, but it declined by 8.6% between 2015 and 2020, according to the Partnership’s analysis. “We've retained or created over 330 jobs thus far and aim for 500 in the coming years. We're a model for how to use public funding to jump start development to support the entrepreneurial ecosystem,” said Natasha Azizi, Executive Director of UP CDC and East End Maker Hub. The East End Maker Hub is part of several landmark projects to position Houston as a national leader in tech innovation.  According to the Houston Tech Report, venture capital investments have grown  from $423 million in 2017 to $2.02 billion in 2021, a near five-fold increase and an unprecedented 47.4% growth rate per year. Click to expand Rugged Robotics team Rugged Robotics recently raised $9.4 million in Series A funding to help the company hire more people, expand its products and more. “We’ve built an amazing foundation, and I’m excited by the road ahead.  Our team is truly inspiring.  I can’t wait to see what we’re capable of,” Morse said. Learn more about Houston's advanced manufacturing sector and innovation ecosystem.