Q3 2014 E. Fort Bend Commercial Real Estate Trends
The Fort Bend office submarket posted 11,923 SF of positive net absorption in the third quarter of 2014, bringing the year-to-date total to 234,383 SF. The average vacancy rate increased 10 basis points (bps) from 13.5% to 13.6% between quarters, and decreased 510 bps from 18.7% in Q3 2013. Houston-based Vista Equities Group purchased 14 acres of the Newland property in Telfair to develop a mixed-use project tentatively dubbed University Commons which will include 40,000 square feet of office space.
MEDICAL OFFICE MARKET
The average vacancy rate for medical office in the Fort Bend submarketincreased by 210 bps from 9.3% in Q3 2013 to 11.4% and by 120 bps from 10.2% in Q2 2014. The average quoted rental rate increased 2.0% from $23.71 in Q3 2013 to $24.18 per SF and by decreased slightly between quarters from $24.27 per SF. Sugar Land Physicians Center 1, a 57,000-SF medical office building in Telfair, will deliver in December 2014. Houston Methodist Sugar Land Hospital is constructing a six-story patient tower and Memorial Hermann-Sugar Land continues construction on its campus expansion which will double the size of the existing campus.
The Fort Bend industrial submarket average vacancy rate decreased 20 bps from 6.8% in Q3 2013 to 6.6%. The quoted average rental rate for industrial space decreased 1.1% from $6.53 to $6.46 per SF NNN in Q3 2013. Aldi Inc. is building a new 650,000-SF distribution center and division headquarters on Highway 90A West in Rosenberg. The grocer entered the Houston market in 2013 and expects to operate 30 new stores by the end of 2015, bringing more than 400 jobs to the Houston Metro area.
The Fort Bend retail submarket recorded 100,279 SF of positive net absorption in Q3 2014. The average asking rental rate increased an incredible 10.5% from $17.21 per SF in Q3 2013 to $ 19.01 per SF. The average vacancy rate decreased 40 bps from $5.0% in Q3 2013 to 4.6%. Vista Equities Group’s $45 million mixed-use project planned for Telfair will include 110,000 square feet of retail space. Chuy’sMexican restaurant recently opened a new location in the Crossing at Telfair.