Q2 2015 E. Fort Bend Submarket Snapshot
E. Fort Bend Commercial Real Estate Trends
The Fort Bend office submarket posted 31,238 SF of positive net absorption in Q2 2015, a 65.9% decrease over the previous quarter. The average vacancy rate fell 50 basis points (bps) from 10.7% to 10.2% between quarters, and decreased 180 bps from 12.0% in Q2 2014. The average quoted rental rate remained steady between quarters, rising 1.3% from $24.91 per SF in Q2 2014 to $25.23 per SF in Q2 2015. A Sugar Land development company recently purchased a 5-acre tract located near the intersection of Hwy 59 and Hwy 6 for the development of Lake Pointe One, a new 150,000-SF class A office building.
Medical Office Market
The average quoted rental rate increased marginally from $25.11 to $25.24 per SF between quarter, increasing 4.0% from $24.27 per SF in Q2 2014. The vacancy rate fell 120 basis points from 13.4% to 12.2% between quarters and rose 110 basis points over the year. Memorial Hermann Sugar Land Hospital continued construction on its campus expansion which will double the size of the existing facilities. The first phase of construction is scheduled to be completed by April 2016.
The average vacancy rate for the Fort Bend industrial submarket decreased 150 bps from 5.7% to 4.2% between quarters and fell 210 bps from 6.3% in Q2 2014. The average quoted rental rate for industrial space increased 1.5% from $6.67 to $6.77 per SF NNN between quarters. Construction continues on Aldi’s new 650,000-SF distribution center and division headquarters on Highway 90A West in Rosenberg. The project is expected to be completed by Q1 2016.
The average asking rental rate for the Fort Bend retail submarket increased marginally between quarters and rose from $19.19 per SF in Q2 2014 to $20.00 per SF. Although the submarket recorded a small amount of negative absorption in Q2 2015, the vacancy rate only increased by 30 basis points over the quarter. Several new retailers to the area opened stores during the 2nd quarter, including Falbo Bros. Pizzeria, Racquet Pro, and Fire it Up Pottery & Art Studio.
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