HOUSTON - TelAve -- Houston's industrial distribution market delivered a record quarter in Q3 2026. Net absorption reached 10 million square feet, and leasing activity rose to 10.4 million square feet, both record highs. Compared with Q2, absorption increased about 49%, while leasing activity rose about 37%. Year to date, net absorption reached 23.1 million square feet, surpassing the 21.4 million square feet delivered through September.

Direct vacancy declined 120 basis points to 5.2%, down from 6.4% last quarter, as recently delivered space continued to lease. The weighted NNN asking rate was 71 cents per square foot. The Southeast submarket led leasing activity with 3.4 million square feet, followed by the Northwest with 2.3 million. The Southeast, Southwest, Northwest and South submarkets accounted for about 80% of quarterly absorption.

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Development remains active, with 13.5 million square feet under construction. About 83% of that space is concentrated in the Northwest, North, Southeast and South submarkets. Houston enters the fourth quarter with record demand, improving vacancy and a healthier balance between new supply and tenant activity.

Read the full report here: https://www.lee-associates.com/houston/2026/10/01/houston-industrial-distribution-market-report-q3-2026/