North
Houston has 5%
overall industrial vacancy, and Northwest is a stunning 3.8%. Even flex space
(a hard property type to lease) has 10% vacancy across the city. Rents are
increasing; Some Brokers have seen recently saw $0.40 net for a distribution lease, a new
benchmark high for Houston, and we think it’ll go higher. Brokers see construction
costs increased $3/SF
in the last six months to about $28/SF.
They’re still rising dramatically, but probably won’t take the overwhelming
leap that many predict (We've heard as high as 25%). Labor is the biggest
issue; most quality contractors are too busy, and some subs are hopping around
projects. HRA, Inc. recommends putting incentives
into your contract to make subs focus on your deal to meet an aggressive
timeline. Other factors contributing to the rise in construction costs include
major competition
driving up land prices. And don’t be excited if you get a great deal—Brokers
say most sites left in the uber desirable North and Northwest submarkets have
hair on them, which can cost big to resolve. We recommends doing your due
diligence but building
now before prices get any higher.
For more information on Houston office space, Houston
retail space or Houston warehouse space and
Houston industrial space, please call 713
782-0260 or see my web site at : www.houstonrealtyadvisors.com
Thank you for your interest.
Ed A. Ayres
Houston Realty Advisors, Inc.
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