Even a historic hurricane couldn’t bring Houston to a halt in 2017. The city’s booming housing market hit record highs last year, and major road upgrades are underway throughout the region. Perhaps even more exciting though, is the renewed surge of industrial space being developed in and around Houston. After six straight quarters of steady decline in construction volume, crews broke ground on 12 big-box warehouses and distribution centers in 2017.
In fact, a recent study conducted by the commercial real estate firm JLL estimates that developers are currently constructing 4.6 million square feet of industrial space across Houston. Once they’re complete, at least two of these industrial buildings will be 500,000 square feet or more.
So what’s driving the sudden increase in Houston’s industrial development?
According to real estate analysts, the rise of e-commerce is largely responsible for this recent trend. Online retailers are changing the face of modern supply chain distribution, and they need a whole lot of infrastructure to support their shipping demands. These warehouses and distribution centers provide online retailers with a cost-effective way to get their products from point A to point B in a timely fashion. Thanks to its central location on the Gulf Coast, Houston is being recognized as an ideal e-commerce distribution hub.
“Changes in supply chain planning are beginning to put Houston on the radar for regional distribution facilities and fulfillment centers, driving demand for larger industrial buildings,” said JLL in its report.
JLL also predicts that 2018 will be another good year for Houston’s commercial real estate market. At Texas Contractors Equipment, we can’t wait to see what this year has in store for Houston.