Texas Warehouse Market 2023Texas Warehouse Property Overview for begining in 2023
Texas Warehouse Market
Texas Warehouse supply grew larger than the nations in 2022. 16 percent of the deliveries nationwide occured in Texas. Demand came in at 3.5% versus the rest of the country at a paltry 0.1 percent. Reason for demand? Of the non-farm payrolls, 2.3M Texas jobs fell into 3 categories that use warehouse property solutions. Austin leaded the growth followed respectively by Dallas , Houston and San Antonio.
Rental Rates for Texas Warehouse Market
Lease rates compared to the USA are within the same range as other MSA’s (Metro statistic areas).
1. Texas Lease rates ranged from Houston at $8.45 psf to Austin $13.70 per square foot.
2. At the end of 2022, the vacancy rates only at 5% were higher than a vacancy at 3.8% within the USA.
3. Square footage with over 2.5 Billion square feet of industrial space.
DFW has the largest percentage of space at 42%, followed by Houston at 30%.
Austin and San Antonio account for 12% of the warehouse space in Texas.
Within the past 5 years, Austin accounts for the highest inventory growth in Texas. The balance of the cities in Texas had growth in the upper teens. Most inventory growth started in 2014. During Q1 2022, Austin started moving past the large metro areas of Texas with inventory growth.
Availability of product in Austin has grown 50% since 2007. Because demand has been so high, even with more inventory rents have increased as well. Leasing rents currently are static in comparison with other MSA’s in Texas currently.
Warehouse Market Rental Trends in Texas
- 5 Year rental growth has been steady
- DFW has had growth of 64%
- Smaller MSA’s posted a total of 52% growth
- Since 2017 of the remaining large MSA’s -San Antonio came in at 42%
- Houston at 27% growth
- Austin at 21% growth
- Rental rates vary greatly from Texarkana at 44.00 per square foot to Midland at $15 psf (smaller MSA’s)
- Lease Negotiations – your broker should have expertise to negotiate beneficial terms and conditions.