1. www.colliers.com/houston
Q3 2013 | INDUSTRIAL MARKET
2%
3%
4%
5%
6%
7%
8%
-500,000
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
Absorption New Supply Vacancy
Houston’s industrial market remains one of the top ten healthiest U.S. industrial
markets because of its low vacancy, stable rental rates, and positive absorption.
Houston posted 1.1M SF of positive net absorption in the third quarter, bringing
the year-to-date net absorption to 4.5M SF. Industrial leasing activity reached
3.4M SF, mostly due to large renewals. Houston’s average industrial vacancy
rate increased from 5.0% to 5.3% between quarters because of the new space
added to the market, and remained unchanged when compared to the same
quarter one year ago. The citywide average quoted industrial rental rate
increased to $5.86 from $5.74 per SF NNN between quarters, and increased on
a year-over-year basis from $5.77 per SF NNN.
Houston’s lack of available industrial inventory has spurred demand for new
product. Developers have responded and currently have 5.7M SF under
construction. Some of the increased activity has been driven by build-to-suit
projects for companies expanding in or relocating to the Houston market;
however, more than half is in spec developments (3.2M SF). As Houston’s
available industrial inventory shrinks, we believe the increasing demand for new
product will continue to spur both build-to-suit and spec development.
The Houston metropolitan area added 80,700 jobs in the year ending August
2013, an annual increase of 3.0% over the prior year’s job growth. Further,
Houston’s unemployment fell to 6.1% from 6.9% one year ago.
With continued expansion in the energy industry, Houston’s economy is
expected to remain healthy for both the near and long-term.
RESEARCH & FORECAST REPORT
HOUSTON INDUSTRIAL MARKET
ABSORPTION, NEW SUPPLY & VACANCY RATES
Houston’s Industrial Market 2013 YTD Positive Net
Absorption Reaches 4.5M SF
UNEMPLOYMENT 8/12 8/13
HOUSTON 6.9% 6.1%
TEXAS 6.9% 6.3%
U.S. 8.2% 7.3%
JOB GROWTH
ANNUAL
CHANGE
# OF JOBS
ADDED
HOUSTON 3.0% 80.7K
TEXAS 2.4% 258.5K
U.S. 1.6% 2.2M
JOB GROWTH & UNEMPLOYMENT
(Not Seasonally Adjusted)
HOUSTON INDUSTRIAL
MARKET INDICATORS
Q3 2012 Q3 2013
CITYWIDE NET
ABSORPTION (SF) 1.2M 1.1M
CITYWIDE AVERAGE
VACANCY 5.3% 5.3%
CITYWIDE AVERAGE
RENTAL RATE $5.77 $5.90
SF DELIVERED 1.0M 2.6M
SF UNDER
CONSTRUCTION 2.4M 5.7M
Houston

2. RESEARCH & FORECAST REPORT | Q3 2013 | HOUSTON INDUSTRIAL MARKET
COLLIERS INTERNATIONAL | P.2
Vacancy & Availability
Although 2.6M SF of new inventory
delivered during the third quarter,
Houston’s industrial vacancy rate only
increased from 5.0% to 5.3% between
quarters.
At the end of the second quarter,
Houston had 25.5M SF of vacant
industrial space citywide, 1.5M SF
more than the previous quarter.
Among the major industrial corridors,
the Northeast Corridor has the lowest
vacancy rate, 3.0%, followed by the
Northwest Corridor at 4.2%.
Houston’s industrial construction
pipeline had 5.7M SF of projects
underway at the end of the third
quarter, including 3.2M SF of spec
development. The largest project
under construction is a 535,000-SF
BTS distribution warehouse for Igloo,
located in Katy, TX. A list of
additional buildings currently under
construction can be found on Page 4
of this report. The largest spec
project in the pipeline is a 328,000-SF
distribution warehouse located on
Imperial Valley Drive in North
Houston.
Rental Rates
Houston’s citywide average quoted
industrial rental rate for all product
types increased from $5.74 to $5.86
per SF NNN in the third quarter.
By property type, the average quoted
NNN rental rates are as follows: $5.52
per SF for Distribution space; $4.49
per SF for Bulk Logistics space; $6.00
per SF for Flex/Service space; with
Tech/R&D space averaging $12.56
per SF.
Absorption & Demand
Houston’s industrial market posted
1.1M SF of positive net absorption in
the third quarter, bringing the 2013
year-to-date total to 4.5M SF of
positive net absorption. The North and
Northwest Corridor submarkets out-
performed all others in the third
quarter, posting the largest positive
net quarterly absorptions of 398K SF
and 324K SF, respectively.
There were several major tenant
move-ins contributing to net
absorption gains in the third quarter,
including Crowley Maritime (128,500
SF); Favorite Brands (91,200 SF);
Delta Petroleum (67,400 SF); Crane
Worldwide (64,800 SF); and National
Oilwell Varco ( 57,900 SF).
Leasing
Houston’s industrial leasing activity
reached 3.4M SF in the third quarter.
A list of select third quarter industrial
lease transactions are included in the
table below.
1 Colliers International transaction
2 Renewal
3 Expansion
Building Name/Address Submarket SF Tenant Lease Date
4331 Underw ood Dr East-Southeast Far 300,000 A-International1, 2
Aug-13
9830 Rosprim St Northw est Inner Loop 119,700 Core Labratories2
Jul-13
7111-7251 Clinton Dr Dow ntow n 107,862 Chemtrusion, Inc.1, 2
Jul-13
12620 W Airport Blvd Sugar Land 71,162 Pharmedium Sep-13
3710 Cedar Blvd East-Southeast Far 67,427 Delta Petroleum LLC1
Jul-13
10225 Mula Rd Hw y 59/Hw y 90 (Alt) 65,130 EVS Valves, Inc.2
Sep-13
1601 Gillingham Ln Sugar Land 55,326 Ellen Lighting1
Aug-13
10739 W Little York Northw est Inner Loop 49,530 United Van Lines2
Sep-13
550 Canino Rd North Outer Loop 45,500 IFCO Systems North America Aug-13
10355 W Little York Rd, Suite 200 Northw est Inner Loop 32,045 IHS Global 2
Aug-13
3407 Navigation Blvd CBD-NW Inner Loop 31,972 Sam-Tex Exports LLC Sep-13
9000 Kirby Dr Southw est Far 30,271 Walgreens2
Sep-13
1315 W Sam Houston Pky N West Outer Loop 26,280 Cosentino Aug-13
6511 West Little York Northw est Near 22,939 Cameron International Corporation Jul-13
415-425 Blueberry St Northw est Near 20,708 A Finer Event Sep-13
Q3 2013 Top Industrial Leases

3. RESEARCH & FORECAST REPORT | Q3 2013 | HOUSTON INDUSTRIAL MARKET
COLLIERS INTERNATIONAL | P.3
Houston Industrial Market Summary
Houston industrial sales activity
remained steady between quarters
with 100 property sales recorded in
Q3 2013, compared to 91 in Q2
2013. Two of this quarter’s sales
transactions are summarized at
right.
Sales Activity
Q3 2013
Total Sales : $45.8M
No. of Properties: 100
Total SF: 7.4M
Average $/SF: $66
Average Cap Rate: 7.3%
Mac Process Inc. sold a 75,000-SF
Class C industrial warehouse to
Deepwater Corrosion Services, Inc.
for $4.7M or $62 per SF. The building
is located on FM 529 in the Northwest
Industrial submarket. The buyer will
occupy the building.
Fairview Equity Holdings LLC sold a
22,500-SF Class A industrial
warehouse to Laser Welding Solutions
for $2.7M or $120 per SF. The building
is located on Fairview in the Northwest
Industrial submarket. The buyer will
occupy the building.
Sources: Real Capital Analytics; CoStar Comps
Market Rentable Area
Direct Vacant
SF
Direct
Vacancy
Rate
Sublet
Vacant SF
Sublet
Vacancy
Rate
Total Vacant
SF
Total
Vacancy
Rate
3Q13 Net
Absorption
YTD 2013 Net
Absorption
3Q13
Completions
YTD 2013
Completions
SF Under
Construction
Greater Houston Total 483,182,085 25,011,430 5.2% 468,607 0.1% 25,480,037 5.3% 1,095,902 4,466,595 2,624,761 4,591,200 5,654,203
CBD-NW Inner Loop 11,717,053 609,777 5.2% 22,200 0.2% 631,977 5.4% 26,625 127,521 - - -
Downtown 31,786,676 1,769,335 5.6% - 0.0% 1,769,335 5.6% 5,206 (9,286) - - -
North Inner Loop 5,014,316 451,369 9.0% - 0.0% 451,369 9.0% - - - - 22,000
Southwest Inner Loop 7,771,455 77,649 1.0% - 0.0% 77,649 1.0% 40,918 53,864 - - -
Total CBD Corridor 56,289,500 2,908,130 5.2% 22,200 0.0% 2,930,330 5.2% 72,749 172,099 - - 22,000
North Fwy/Tomball Pky 15,922,820 1,301,794 8.2% - 0.0% 1,301,794 8.2% 190,456 281,693 83,542 497,694 270,200
North Hardy Toll Rd 26,912,366 2,108,286 7.8% 28,750 0.1% 2,137,036 7.9% 213,372 393,098 761,807 1,429,957 1,422,142
North Outer Loop 18,240,752 1,212,371 6.6% - 0.0% 1,212,371 6.6% 25,345 (3,488) 150,189 246,616 410,310
The Woodlands/Conroe 14,033,747 613,407 4.4% - 0.0% 613,407 4.4% (31,496) 194,143 48,720 143,621 161,600
Total North Corridor 75,109,685 5,235,858 7.0% 28,750 0.0% 5,264,608 7.0% 397,677 865,446 1,044,258 2,317,888 2,264,252
Northeast Hwy 321 1,231,673 14,879 1.2% - 0.0% 14,879 1.2% 12,841 (5,399) - - -
Northeast Hwy 90 16,057,844 220,221 1.4% 129,000 0.8% 349,221 2.2% 57,358 108,585 - 20,000 20,000
Northeast I-10 3,634,195 135,170 3.7% - 0.0% 135,170 3.7% 1,280 14,902 - 21,000 -
Northeast Inner Loop 11,572,879 491,291 4.2% - 0.0% 491,291 4.2% 67,704 245,205 - - -
Total Northeast Corridor 32,496,591 861,561 2.7% 129,000 0.4% 990,561 3.0% 139,183 363,293 - 41,000 20,000
Hwy 290/Tomball Pky 15,312,554 826,582 5.4% - 0.0% 826,582 5.4% 208,832 195,432 226,375 320,675 176,143
Northwest Hwy 6 4,109,096 133,170 3.2% - 0.0% 133,170 3.2% (21,947) (13,123) 14,400 14,400 30,000
Northwest Inner Loop 58,868,025 2,284,349 3.9% 74,126 0.1% 2,358,475 4.0% (115,584) 438,206 150,000 150,000 48,664
Northwest Near 16,772,428 960,014 5.7% 69,519 0.4% 1,029,533 6.1% (67,458) 27,763 299,840 317,840 -
Northwest Outlier 15,220,274 956,351 6.3% - 0.0% 956,351 6.3% 226,688 633,805 771,393 355,034 1,682,731
West Outer Loop 23,204,871 221,653 1.0% 26,000 0.1% 247,653 1.1% 93,184 452,660 22,500 58,250 216,350
Total Northwest Corridor 133,487,248 5,382,119 4.0% 169,645 0.1% 5,551,764 4.2% 323,715 1,734,743 1,484,508 1,216,199 2,153,888
South Highway 35 30,781,977 1,038,098 3.4% 23,600 0.1% 1,061,698 3.4% 68,255 152,442 50,034 70,706 349,547
South Inner Loop 13,133,353 834,349 6.4% - 0.0% 834,349 6.4% (48,189) (159,862) - - -
Total Southern Corridor 43,915,330 1,872,447 4.3% 23,600 0.1% 1,896,047 4.3% 20,066 (7,420) 50,034 70,706 349,547
East I-10 Outer Loop 13,560,049 195,135 1.4% - 0.0% 195,135 1.4% - (79,600) - - -
East-Southeast Far 46,328,329 4,481,606 9.7% 13,000 0.0% 4,494,606 9.7% 2,319 308,526 - 325,446 502,818
Southeast Outer Loop 18,050,821 498,354 2.8% - 0.0% 498,354 2.8% 111,420 (125,232) - - -
Total Southeast Corridor 77,939,199 5,175,095 6.6% 13,000 0.0% 5,188,095 6.7% 113,739 103,694 - 325,446 502,818
Highway 59/Highway 90 22,009,061 923,421 4.2% 50,372 0.2% 973,793 4.4% (60,685) 678,522 - 475,000 223,800
Southwest Far 10,471,766 848,475 8.1% 12,500 0.1% 860,975 8.2% 39,309 119,786 45,961 83,961 90,510
Southwest Outer Loop 12,826,512 770,021 6.0% 4,240 0.0% 774,261 6.0% 20,935 124,062 - - -
Sugar Land/Ft Bend Co 18,637,193 1,034,303 5.5% 15,300 0.1% 1,049,603 5.6% 29,214 312,370 - 61,000 27,388
Total Southwest Corridor 63,944,532 3,576,220 5.6% 82,412 0.1% 3,658,632 5.7% 28,773 1,234,740 45,961 619,961 341,698
Houston Industrial Market Statistical Summary
3rd Quarter 2013

4. RESEARCH & FORECAST REPORT | Q3 2013 | HOUSTON INDUSTRIAL MARKET
COLLIERS INTERNATIONAL | P.4
Q3 2013 Industrial Under Construction – 60,000 SF or greater
Q3 2013 Industrial Deliveries - 60,000 SF or greater
Submarket Cluster Submarket Building Address RBA
% Pre-
Leased Developer
Estimated
Delivery
Northwest Corridor Northwest Outliers 28501 US-90 Hwy 535,000 100.0% Panattoni Nov-13
Northwest Corridor Northwest Outliers 28900 US-90 Hwy 500,000 100.0% Panattoni Oct-13
Northwest Corridor Northwest Outliers 30602 Mcallister Rd 400,000 100.0% KDW Ltd Nov-13
North Corridor North Hardy Toll Rd Imperial Valley Dr @ FM 1960 328,020 0.0% Avera Companies Dec-13
North Corridor North Hardy Toll Rd 110 Airtex Dr 267,170 0.0% DCT Industrial Trust Nov-13
North Corridor North Outer Loop 121 Esplanade 244,550 0.0% IDI Apr-14
Southeast Corridor East-Southeast Far 3750 Highway 225 185,168 0.0% The Carson Companies Feb-14
Northwest Corridor West Outer Loop 16257 Port NW 171,850 0.0% Transwestern Mar-14
North Corridor North Fwy/Tomball Pky 11220 Ella Blvd 163,000 0.0% Liberty Property Trust Dec-13
North Corridor North Outer Loop 13627 W Hardy Rd 151,339 100.0% TNRG Nov-13
Southern Corridor South Hwy 35 11951 Spectrum Blvd 150,000 100.0% Unknown Feb-14
North Corridor North Hardy Toll Road 525 Century Plaza Dr 149,760 100.0% Avera Companies Dec-13
Southern Corridor South Hwy 35 7232 Airport Blvd 137,297 100.0% Unknown Dec-14
North Corridor North Hardy Toll Road 16501 Central Green Blvd 129,112 0.0% Verde Nov-13
North Corridor North Hardy Toll Road 16507 Central Green Blvd 129,112 0.0% Verde Nov-13
Southwest Corridor Hwy 59/Hwy 90 (Alt) 13615 S Gessner Rd 123,300 0.0% Stream Realty Partners, L.P. Mar-14
Southeast Corridor East-Southeast Far 3700 Highway 225 118,500 0.0% The Carson Companies Feb-14
Southwest Corridor Hwy 59/Hwy 90 (Alt) 13721 S Gessner 85,500 0.0% Stream Realty Partners, L.P. Mar-14
North Corridor North Hardy Toll Road 19245 Kenswick Dr 74,880 0.0% Trammell Crow Company Nov-13
Northwest Corridor Hwy 290/Tomball Pky 7220 N Sam Houston Pky 70,000 100.0% TNRG Nov-13
Northwest Corridor Northwest Outliers 22220 Merchants Way 67,743 0.0% InSite Commercial Real Estat Oct-13
North Corridor Ind North Fwy/Tomball Pky 1050 Greens Pky 67,200 0.0% Liberty Property Trust Dec-13
Southwest Corridor South Main/Medical Center 9380 Kirby Dr 64,260 0.0% Warehouse Associates Jan-14
Northwest Corridor Northwest Outliers 461 Stonegate Dr 63,382 100.0% Clay Development Oct-13
Southeast Corridor East-Southeast Far 3800 Highway 225 61,794 0.0% The Carson Companies Feb-14
Submarket Cluster Submarket Building Address RBA % Pre- Leased Developer Delivered
Northwest Corridor Northwest Outliers I-10 & Highway90 500,000 71.4% Medline Industries, Inc. Sep-13
Northwest Corridor Northwest Near 7310 Langfield - Bldg 200 299,840 0.0% Avera Companies Jul-13
North Corridor North HardyToll 8120 Humble Westfield Rd 240,000 0.0% Duke Realty Sep-13
North Corridor North HardyToll 16200 Central Green Blvd 181,067 100.0% LibertyPropertyTrust Sep-13
North Corridor North HardyToll 500 Northpark Central Dr 174,200 0.0% Prologis Inc. Jul-13
North Corridor North HardyToll 14650 Heathrow Forest Pky 121,919 100.0% Wolff Properties Aug-13
North Corridor North HardyToll 4730 Consulate Plaza Dr 101,200 0.0% EastGroup Properties Aug-13
North Corridor North Fwy/Tomball Pky 21200 Spring Plaza Dr 83,542 100.0% Unknown Jul-13
Northwest Corridor Northwest Outliers 21301 Park Row Rd 79,950 100.0% Transwestern Sep-13
Northwest Corridor Northwest Inner Loop 1315 W Sam Houston PkyN - 70,000 0.0% Caldwell Companies Jul-13
Northwest Corridor Northwest Outliers 21201-21601 Park Row Dr 64,350 100.0% Transwestern Sep-13

5. RESEARCH & FORECAST REPORT | Q3 2013 | HOUSTON INDUSTRIAL MARKET
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Houston, Texas 77027
Main +1 713 222 2111
LISA R. BRIDGES
Director of Market Research | Houston
Direct +1 713 830 2125
Fax +1 713 830 2118
lisa.bridges@colliers.com
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