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Houston industrial supply slows as developers struggle to secure equity
CBRE data shows about 20M SF was under construction at the end of 2025, while only about 18M SF was under construction in the second quarter, even as 4M SF projects began moving forward in July and August.
Houston’s industrial development momentum remains supported by onshoring, data center building, and port traffic growth, but the local supply pipeline is being held back by a shortage of institutional equity, according to Bisnow.
Bisnow reports that just over 20M SF of industrial space was under construction at the end of 2025, the most since the second quarter of 2023, but the total fell to about 18M SF in the second quarter. The pace picked up again later, with roughly 4M SF of projects breaking ground in July and August.
Brokers and developers say financing for the debt side is more available than in prior years, yet institutional equity partners have become harder to secure. Northmarq Senior Vice President Taylor Phillips said many institutional investors have been reluctant after slower lease-up outcomes from 2021 deals, and he noted a shift away from structures that relied on institutional partners covering most of the equity.
Developers that can self-fund a portion of the capital stack are seeing more traction, Bisnow reports, with Phillips saying success tends to come from those using equity they raised themselves to cover about 20% of the capital stack. The outlet also cited Mohr Capital’s August groundbreak for its 372K SF Oates 610 project, where a related family office co-investment helped fill the equity gap, and noted that Portman co-invested with an institutional equity limited partner on its first industrial development.