The Fort Bend office submarket posted 19,517 SF of positive net absorption in Q3 2019. The average vacancy rate remained steady at 12.1%. The average quoted rental rate increased from $28.15 to $28.25 per SF. Leasing activity decreased over the quarter by 47%. One 27,000-SF office building is currently under construction on University Blvd. The property known as The Marcel District is scheduled to deliver in December 2019.
Medical Office Market
The average quoted rental rate increased slightly over the quarter from $28.08 to $28.16 per SF. The average vacancy rate rose 70 bps from 13.2% in Q2 2019 to 13.9% in Q3 2019. Leasing activity declined by 10% over the quarter. Three buildings totaling 136,190 SF are currently under construction. The largest of the three is an 87,500-SF, 100% pre-leased medical office condo located at 800 Bonaventure Way.
Although the submarket recorded 241,800 SF of positive net absorption during Q3 2019, vacancy still increased due to the completion of four new buildings that were added to inventory. The addition of 668,382 SF of new inventory increased the average industrial vacancy rate 130 basis points, rising from 5.5% to 6.8%. The average quoted rental rate rose 1.5% over the quarter from $7.45 per SF to $7.56 per SF. Currently, there are 26 buildings with 1.7M SF of industrial space under construction. The largest project is a 248,930-SF speculative industrial warehouse located in the Waypoint Business Park on S Sam Houston Parkway in Missouri City, TX.
The average asking rental rate for the Fort Bend retail submarket decreased 1% from $23.01 per SF in Q2 2019 to $22.79 per SF in Q3 2019. The submarket recorded 74,086 SF of negative net absorption in Q3 2019, increasing the vacancy rate from 5.2% to 5.9%. Seven properties totaling 179,261 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.