Investment & Development Ventures, along with equity partner Standard Real Estate Investments, is planning to develop Veterans Memorial Business Park, a 463,000-square-foot industrial campus in Northwest Houston. The site, which counts as infill, is at 10326-10330 Veterans Memorial Drive, with construction slated to begin by the end of the year.
Veterans Memorial Business Park will consist of three spec buildings of 219,000 square feet, 151,000 square feet and 93,000 square feet. All of them will have 32-foot clear heights and were designed to accommodate tenants as small as 46,000 square feet.
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“Houston is one of the few major industrial markets with an enviable list of diverse industrial demand drivers,” Shubhra Jha, principal at Standard, told Commercial Property Executive.
Those drivers include the busiest U.S. port relative to overall tonnage, U.S.-leading population growth, access to other major Texas and southeastern U.S. cities. Houston also has a massive manufacturing sector that includes the world’s largest petrochemical complex, Jha said.
“That deep bench of demand generators, along with a business-friendly and low-cost environment, makes Houston’s industrial market attractive to a diverse slate of owners and users.”
Standard has been active in other markets as well. The firm recently invested in such industrial projects as a 180,000-square-foot facility in Reno, Nev., with Mohr Capital, and partnered with Trammell Crow on the development of the Apopka Business Center in Orlando, Fla.
The company targets shovel-ready warehouse/logistics projects between 150,000 square feet and 500,000 square feet in major logistics markets nationwide.
As for IDV, the firm has developed more than 9 million square feet of projects since its formation and delivered 4.1 million square feet of warehouse space since the start of 2023. Three-quarters of the completed space has been either leased or sold to a user or institutional equity buyer.
Houston’s industrial market, still healthy
The Houston industrial market had 3.2 million square feet of absorption in the first quarter of this year, down from its postpandemic peak, but slightly above its prepandemic (2016-2019) average, according to an Avison Young report. The market’s tenant base is fairly diverse, including logistics, but also wholesalers and industrial equipment and machinery businesses.
Construction activity in the market, by contrast, is currently at its lowest point since 2016, the same report shows, with just 985,000 square feet breaking ground in the first quarter of 2024. Before the pandemic, development averaged 4.2 million square feet per quarter. The trend in Houston mirrors the wider U.S. slowdown of industrial development.
The postpandemic surge in industrial development in Houston may have ebbed, but the sizable influx of space in recent quarters (including a record total in 2023) has pushed the market’s vacancy rate up 190 basis points year-over-year in the first quarter, coming in at 7.6 percent. But since demand is still robust, vacancies will probably head downward again as the new space is absorbed.