Office investment sales volume in the first half of 2025 exceeds 2024 totals

Houston, TX – Avison Young, a global real estate advisory firm, today released its Second Quarter 2025 Industrial Market Report for Houston. The industrial market remains active, albeit at a more sustainable pace after the post-pandemic boom.

Houston’s industrial market absorbed a healthy 2.0 million square feet (msf) in the second quarter of 2025, bringing the year-to-date total to 3.4 msf. This steady demand shows that businesses are still looking for space.

“After a few years of incredible growth, we’re seeing the Houston industrial market return to its natural rhythm,” said Drew Coupe, Principal at Avison Young. “While absorption figures are returning to pre-pandemic norms, the underlying demand is clearly still there, especially from our local and regional businesses.”

Mirroring broader economic adjustments, total net absorption in Q2 2025 declined to one of its lowest quarterly figures since Q2 of 2020. This serves as a pivot point, suggesting a continued normalization of market activity

Developers in Houston are maintaining a significant pace, with 13.8 msf of industrial space currently under construction. While the pace of new deliveries slowed in the first half of 2025 to 6.8 msf, the lowest first-half total since 2018, new buildings are still being leased up. Only 47.1% of new deliveries in the second quarter were pre-leased, yet completions still topped pre-pandemic quarterly averages by 11.8%, showing underlying strength. Developers also broke ground on 3.8 msf, with 9.6 msf slated to deliver by year-end.

Leasing activity in Houston’s industrial market reached 7.1 msf in the second quarter, making the year-to-date total 16.6 msf. Small- to medium-sized transactions (20,000 to 250,000 sf) continue to dominate the market, accounting for an overwhelming 94.2% of all transactions. In stark contrast, larger deals (over 250,000 sf) saw significantly less activity, with only 13 deals recorded, highlighting that local and regional companies are truly driving the current leasing market.