PLENTY OF ROOM AT THE PORT Lots of space is available in Houston’s industrial soft spot — on the far east side of town: “A lot of developers built huge facilities on spec at the Port of Houston. However, with trade down due to the global slowdown, the Port is starting to feel some pain, too; as is the real estate that sprang up to serve it. Exports are falling off, while imports are going from ship, to intermodal, to the rest of the country rather than remaining in Houston warehouses. Added to the fact was that building was out of control in that area during the mid-2000s. ‘Three or four years ago, everyone wanted to be at the Port, so everyone put their buildings there,’ [Grubb & Ellis Senior Vice President John] Nicholson says. ‘It was crazy.’ The result is a lot of vacant product, especially warehouse space, in the far east submarket. Transwestern’s report puts the East-Southeast Far submarket at 13.5% vacancy, including sublet space. The total inventory in that area is 34 million square feet, with 1.8 million square feet under construction. The Grubb & Ellis numbers for East Southeast Far have 30 million square feet of inventory and a 20% vacancy. And all of Houston is hunkering into recession mode in the area of lease negotiation. Nicholson and [Transwestern managing director Brian K.] Gammill say short-term deals are more common, as are more free-rent concessions.” [Globe St.]
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