Fort Bend County Commercial Real Estate Snapshot
Key Takeaways
- Office leasing activity stable
- Office, medical-office, industrial rents up
- Industrial construction increases
- Retail vacancy stable
A total 1.8M SF of office space is available in Fort Bend County; this includes 1.2M SF of general-purpose office space and 573,379 SF of medical-office space. Overall, the total general-purpose office inventory of 6.0M SF has a vacancy rate of 37.3%, a major increase from previous quarters. This was primarily due to Fluor relocating from its long-time, 1.2M-SF campus in Sugar Land into 308,186 SF of new space in west Houston; this also resulted in negative net absorption of 971,826 SF during the third quarter. Leasing activity remained steady with the current quarter’s 65,109 SF slightly higher than the 64,170 SF in the prior quarter. One 32,000-SF office building is under construction, while no buildings delivered year to date. The average quoted rental rate has marginally increased to $28.83 PSF from last quarter but is 3.4% down from year over year. Sublease space rose slightly but remains low at 28,636 SF.
Medical-Office Highlights
The medical-office market in Fort Bend County contains 2.8M SF of medical-office inventory with a current vacancy rate of 20.0%, a decline from both last quarter and year over year. Net absorption dropped but remained positive with 7,707 SF, which is a decrease from last quarter’s 141,095 SF but an improvement from negative absorption recorded year over year. Leasing activity stayed consistent with 50,873 SF, although slightly below last quarter and year over year. The average quoted gross rental rate decreased to $30.74 PSF from the previous quarter but represents a 9.9% increase year over year. Two Class A medical-office buildings totaling 183,000 SF are currently under construction, one by Memorial Hermann and one by Village Medical, with no deliveries in the third quarter.
Industrial Highlights
The Fort Bend County industrial market contains 49.9M SF of industrial inventory that is 5.7% vacant, a slight increase from 5.5% the prior quarter. Net absorption turned positive to 13,977 square feet with a year-to-date total of 284,120 SF. Five small buildings delivered for 118,400 SF, while construction skyrocketed to 2.3M SF due to the groundbreaking of the first five spec Blue Ridge Commerce Center buildings totaling 1.4M SF. Leasing activity during the third quarter jumped to 754,460 SF due to Lecangs’ 509,975- SF lease at 28119 Katy Freeway. Rental rates increased slightly to $9.88 from the prior quarter but are down 2.6% year over year.
Retail Highlights
Fort Bend County’s retail market contains 42.4M SF of retail space. The submarket posted positive net absorption of 152,898 SF during the third quarter, a significant decrease from both the previous quarter and year over year. Leasing activity remained steady at 268,886 SF, slightly below last quarter’s 288,433 SF but higher than the 229,142 SF year over year. One of the larger deals included CMS Collision Repair’s 33,815-SF lease at 12002 Southwest Freeway. Vacancy tipped up to 5.5% from the second quarter’s 5.4% and also up from 5.2% year over year. The average asking rental rate dipped to $23.04 PSF from the previous quarter’s $23.22 PSF, but the new rate represents a 10.7% increase from a year ago. There are currently 11 projects underway totaling 570,485, with a Target store representing the largest, and nine buildings representing 169,539 SF delivered during the third quarter.
Submarket Map
2024 REPORT REVISIONS
The Q3 2024 Fort Bend CRE Snapshot reflects a couple significant changes first made in Q1 2024. Colliers now reports statistics covering properties located in all of Fort Bend County with office and office-medical excluding buildings 75% or more occupied by the owner. Due to these revisions, direct comparisons to prior published editions of the Fort Bend report will be challenging.
Property size parameters included in the snapshot are all office buildings 20,000 square feet or larger excluding owner-occupied, industrial and flex properties 10.000 square feet or larger, and retail properties 5,000 square feet or larger.
