Key Takeaways

CRE Snapshot • Office vacancy drops, absorption increases

Fort Bend
County
24Q1
• Medical-office leasing climbs
• Industrial supply outpaces demand
• Please see page 2 for report revisions

YOY YOY Under YOY Overall Avg Asking YOY

Vacancy Rate Net Absorption Construction Lease Rate (FSG)

20.6% FORECAST 62.4K SF FORECAST 302.0K SF FORECAST

$28.81/SF FORECAST

Office Highlights
A total of 2.5M SF of office space is available in Fort Bend County; this includes 1.9M SF of general-purpose office space and 626,139
SF of medical-office space. Overall, the general-purpose office inventory of 8.4 M SF has a vacancy rate of 20.6%, down from 21.1%
last quarter and a marginal increase from 20.5% year-over year. Net absorption during the first quarter was 62,380 SF, triple the
prior quarter’s total and an improvement from a slightly negative absorption year-over year. Leasing activity slowed to 260,836 SF
from 456,038 SF the previous quarter but represented an increase from the 116,165 SF year-over year. Three office buildings totaling
302,000 SF are under construction, while one 32,200-SF building delivered during the quarter. The average quoted rental rate has
declined, dropping to $28.81 PSF from $29.89 PSF last quarter and $29.75 year-over year. Sublease space also decreased 26.5% from
the prior quarter with a similar decrease year-over year. One of the largest deals signed during the first quarter was Westin Homes’
20,984-SF renewal at 2245 Texas.
YOY YOY YOY YOY
Under Overall Avg Asking
Vacancy Rate Net Absorption Construction Lease Rate (FSG)
23.6% FORECAST
25.0K SF FORECAST
270.0K SF FORECAST
$29.64/SF FORECAST

Medical-Office Highlights
The medical-office market in Fort Bend County contains 2.4M SF of medical-office inventory with a current vacancy rate of 23.6%, a
drop from last quarter’s 24.6% rate but an increase from 19.9% year-over year. Net absorption remained positive with 24,961 SF, an
improvement from last quarter’s 5,515 SF but a decrease from 38,354 SF year-over year. Leasing activity totaled 192,996 SF, a major
improvement from the 59,436 SF of the previous quarter and from the 26,652 SF year-over year. The average quoted gross rental rate
increased slightly to $29.64 PSF from the previous quarter and 4.0% year-over year. Two medical-office buildings totaling 270,000 SF
are currently under construction, with no deliveries the last two quarters. One of the largest leases signed during the first quarter was
Alpha Surgical Center’s 16,666-SF deal at 1111-1211 Highway 6.
YOY YOY Under YOY
Overall Avg Asking YOY
Vacancy Rate Net Absorption Construction Lease Rate (NNN)

3.8% FORECAST
538.4K SF FORECAST
1.2M SF FORECAST
$9.89/SF FORECAST

Industrial Highlights
The Fort Bend County industrial market contains 49.0M SF of industrial space that is 3.8% vacant, an increase from 3.2% the prior
quarter. Supply is outpacing demand with 829,909 SF delivered while net absorption was 538,396 SF. Construction has increased
slightly to 13 buildings totaling 1.2M SF while rental rates dipped to $9.89 from the prior quarter and down 9.0% year-over year. Two
of the largest distribution facilities completed during first quarter included Fort Bend Logistics Center’s Buildings 1 and 2 totaling
224,000 square feet, while the largest absorption included Distributive Alternatives’ move into its new 855,610-SF distribution
warehouse in Kingsland Ranch Logistics Park.
YOY YOY YOY YOY
Under Overall Avg Asking
Vacancy Rate Net Absorption Construction Lease Rate (NNN)
5.5% FORECAST
128.2K SF FORECAST
903.5K SF FORECAST
$22.92/SF FORECAST

Retail Highlights
The Fort Bend County market contains 41.6M SF of retail space, which posted net absorption of 128,181 SF during the first quarter,
up from the prior quarter’s 84,675 SF but lower than the 288,708 SF year-over year. Leasing activity at 274,989 was less than both the
prior quarter and year-over year. Vacancy rose 20 basis points to 5.5% from the prior quarter but remained the same year-over year.
The average asking rental rate increased 9.7% to $22.92 from the prior quarter and 9.9% year-over year. Thirty-three retail properties
totaling 903,523 SF are currently under construction while 13 properties totaling 238,880 SF were delivered during the quarter. One of
the larger retail leases signed in Fort Bend during the first quarter was Trader Joe’s 30,000-SF lease at University Commons.
Fort Bend County | Q1 2024 | CRE Snapshot
Market Statistics
Total Direct Sublease Total Total Previous Net Net Avg Direct
Inventory Availability Availability Availability Vacancy Vacancy Absorption Absorption Under Deliveries Asking
SF Rate Rate Rate Rate Rate Current YTD Construction YTD Rate*

Office

Class A 4,350,077 21.4% 0.5% 22.0% 20.4% 21.5% 72,262 72,262 0 32,200 $31.32
Class B 3,889,702 22.0% 1.7% 23.8% 21.2% 20.9% (9,882) (9,882) 302,000 0 $26.57
Class C 135,737 12.0% 0.0% 12.0% 12.0% 12.0% 0 0 0 0 $0.00

OFFICE TOTALS 8,375,516 21.5% 1.1% 22.6% 20.6% 21.1% 62,380 62,380 302,000 32,200 $28.81

Medical-Office

Class A 482,621 40.1% 0.7% 40.7% 40.8% 41.0% 691 691 0 0 $36.88

Class B 1,889,494 19.1% 2.9% 22.0% 19.2% 20.5% 24,270 24,270 270,000 0 $28.04

Class C 64,617 22.0% 0.0% 22.0% 22.0% 22.0% 0 0 0 0 $0.00

MEDICAL-OFFICE
2,436,732 23.3% 2.4% 25.7% 23.6% 24.6% 24,961 24,961 270,000 0 $29.64
TOTALS
Industrial

Manufacturing 4,520,988 8.5% 1.2% 9.8% 5.7% 8.8% 279,817 279,817 114,000 150,268 $15.61

Office Service/Flex 5,252,134 2.7% 0.5% 3.2% 0.1% 0.6% 26,400 26,400 0 0 $0.00
Warehouse/
39,239,158 9.0% 0.2% 9.2% 4.1% 3.0% 232,179 232,179 1,083,133 679,641 $7.29
Distribution
INDUSTRIAL TOTALS 49,012,280 8.3% 0.3% 8.6% 3.8% 3.2% 538,396 538,396 1,197,133 829,909 $9.89
Retail

RETAIL TOTALS 41,598,761 6.8% 0.1% 6.9% 5.5% 5.3% 128,181 128,181 903,523 238,880 $22.92

*For office and medical-office, asking rates are full-service gross; for industrial and retail, asking rates are NNN.
Source: CoStar

2024 REPORT REVISIONS

The Q1 2024 Fort Bend CRE Snapshot reflects a couple significant changes. Colliers now includes statistics covering properties located in all of Fort Bend County and all
office and office-medical excluding buildings 75% or more occupied by the owner. Due to these revisions, direct comparisons to prior published editions of the Fort Bend
report will be challenging. Property size parameters included in the snapshot are all general-purpose office and medical-office buildings 20,000+ square feet excluding
owner-occupied, industrial and flex properties 10,000+ square feet, and retail properties 5,000+ square feet.
Willis
149 105 Lake
Conroe

Cleveland
105

Conroe 105

Submarket Map
149

1488
242

1488 Magnolia 321

The Woodlands

Tomball
2920

2920

Waller 2920 Spring Dayton

Kingwood To Houston CBD
Hockley
159
Humble
Cypress
Atascocita
IAH Lake
Houston

Crosby

36
Mont Belvieu

Katy
Brookshire
330

CBD Ship
Channel Baytown
225
Bellaire Trinity Bay
Pasadena
Fulshear
La Porte
146

HOU
36
EFD Clear Lake
Richmond Pearland
60
W Airport Blvd

35

League City

Fort Bend County

Alvin Galveston Bay

Needville Texas
City

36
Hitchcock

Galveston

Gulf of Mexico

Texas Fort Bend County Fort Bend County

Fort Bend Team

Kolbe Curtice, CCIM, CLS Jim Pratt Barkley Peschel, CCIM Jason Scholtz
Principal Principal Principal Senior Vice President
+1 281 269 3441 +1 713 830 2147 +1 281 242 2300 +1 281 269 3444
[email protected] [email protected] [email protected] [email protected]

FOR MORE INFORMATION

Patsy Fretwell William Uhalt Copyright © 2024 Colliers
The information contained herein has been obtained from sources
Research Director Research Manager deemed reliable. While every reasonable effort has been made to
Houston Houston ensure its accuracy, we cannot guarantee it. No responsibility is
assumed for any inaccuracies. Readers are encouraged to consult
+1 713 830 2125 +1 713 830 2137 their professional advisors prior to acting on any of the material
contained in this report.
[email protected] [email protected]