Retail and industrial markets have added millions of square feet of warehousing space to meet the demand for construction supplies in the aftermath of Hurricane Harvey, according to reports from commercial real estate firm CBRE.
Retail and warehousing companies are experiencing increased demand as vacancies fall in the aftermath of Hurricane Harvey.
Hurricane Harvey has led to a bump in Houston’s retail and industrial property demand, resulting in decreasing vacancies, according to a new report from commercial real estate firm CBRE.
The aftermath of the storm has led CBRE to predict further demand for warehouse and distribution space as vacancies continue to decline. Prior to Harvey, Houston’s Class A retail market occupancy was 97.2 percent occupied and has since risen 35 base points to 97.6 percent. “Almost all of the 311,552 sq. ft. of new absorption was taken up by newly delivered centers, including the Grand Parkway Marketplace located in the Far North submarket,” noted CBRE.
In the industrial market, demand has risen as vacancy falls. Roughly 3 million square-feet of industrial space was completed and ready for commercial use in the third quarter of 2017, with 83 percent already preleased and vacancies continuing to fall, said CBRE. Industrial market construction has risen as ground broken on new sites has doubled. “Even as over 3 million sq. ft. delivered, under construction volume expanded modestly as almost 3.1 million sq. ft. of new projects broke ground. The Southeast and Northwest captured the majority of this activity, with a notable uptick in spec project starts,” said CBRE.
“Houston’s industrial product was minimally impacted, given the location and retention requirements of institutional class product. Isolated instances of flooding in primarily grade-level product did occur, but the vast majority of Houston’s non-residential property types weathered the storm largely unscathed. The effects of the storm are likely to be realized through a rise in construction activity as residential areas are rebuilt. This has resulted in large warehouse and distribution requirements coming to market to immediately serve demand from rebuilding efforts over the next few years,” said CBRE.
Texas news source, the Houston Chronicle, reported that retailers such as Lowe’s and Home Depot have leased more than a half million square feet of additional warehouse and distribution space to accommodate the surge in demand for building supplies in Harvey’s aftermath. Lowe’s has also stated it plans to hire more than 200 employees at nine stores in San Antonio, Houston and South Texas as a result, the Houston Chronicle said.