E Fort Bend Commercial Real Estate Trends
The Fort Bend office submarket posted 38,962 SF of positive net absorption in Q1 2020. The average vacancy rate decreased to 10.9% from 11.8% over the quarter. The average quoted rental rate increased from $29.55 to $30.97 per SF and leasing activity decreased over the quarter by 72%. There are three buildings totaling 105,300 SF under construction. The largest building under construction is a 56,000-SF expansion for the Houston Community College System, located on W Airport Blvd. The building is expected to deliver in May 2020.
Medical Office Market
The average quoted rental rate decreased over the quarter from $28.00 to $27.61 per SF. The average vacancy rate fell 200 bps to 15.3% from 17.3% in Q4 2019. Leasing activity declined by 28% over the quarter. Currently, there are no properties under construction.
Although the submarket recorded 432,086 SF of positive net absorption during Q1 2020, vacancy still increased due to the completion of new buildings that were added to inventory. The addition of the unleased portion (78%) of 1.3M SF of new inventory increased the average industrial vacancy rate 230 basis points, rising from 7.3% to 9.6%. The average quoted rental rate rose over the quarter from $7.76 per SF to $8.10 per SF. Currently, there are 16 buildings with 779,802 SF of industrial space under construction. The largest project is the 199,170-SF speculative industrial warehouse located in the CityPark Logistics Center on S Sam Houston Pky W in Missouri City, TX.
The average asking rental rate for the Fort Bend retail submarket increased from $22.02 per SF in Q4 2019 to $23.16 per SF in Q1 2020. The submarket recorded 12,591 SF of negative net absorption in Q1 2020, increasing the vacancy rate from 6.1% to 6.3%. Eight properties totaling 208,395 SF are currently under construction. The largest project is Sienna Crossing Phase III, a 60,000-SF addition that will include Spec’s Wine and 24-Hour Fitness as new tenants. The shopping center is expected to deliver in the first quarter of 2020.*For the purpose of this report, the geographical boundaries previously used for the Fort Bend industrial submarket have been updated to include buildings that are typically considered by our clients when they are seeking locations in the Fort Bend/Sugar Land and Missouri City areas.