When semiconductor logistics specialist Infinity Link Logistics signed for 87,000 square feet near Samsung’s Taylor plant in the first quarter of 2026, it joined a parade of suppliers chasing the chipmaker into Central Texas.
Two submarkets over, electronic components manufacturer Baer Manufacturing pre-leased 606,060 square feet at Crosspoint Phase II for a facility that will eventually employ 200 people. In Houston, solar manufacturer T1 Energy took 627,637 square feet at Port 99 Logistics Park, sharing the building with a third-party logistics firm. In North Fort Worth, DSV Contract Logistics inked a 1.05 million-square-foot deal, the largest in the Dallas-Fort Worth metroplex.
What ties these transactions together is the infrastructure they require: modern bulk warehouses with heavy power capacity, speed to occupancy and proximity to the advanced manufacturing hubs reshaping Texas industrial demand. Buildings that once competed primarily on rate and clear height are now competing on electrical infrastructure and delivery timing.
According to Newmark’s research for the first quarter of 2026, Houston posted 3.7 million square feet of positive absorption against 4.7 million square feet of deliveries with vacancy ticking up just 10 basis points to 7.5 percent. Dallas-Fort Worth absorbed 10.4 million square feet against 5.7 million square feet of new supply, dropping vacancy 40 basis points to 8.8 percent. Austin took the opposite path with vacancy climbing to 22.9 percent even as leasing activity improved.
Demand keeps up in Houston
In Houston, the math is pretty straightforward.
“We continue to see strong momentum across the Houston industrial market, with tenant demand largely keeping pace,” said Joseph Smith, Senior Vice President on the CBRE Industrial Service Team in Houston. “We have the tenant demand to take over all the space currently under construction or recently delivered.”
That confidence shows up in the construction numbers. Newmark reports Houston’s pipeline grew 9.6 percent during the quarter to 27.9 million square feet with 25.3 percent already preleased. Developers are still betting on Houston, but increasingly on a different kind of tenant than the market historically served.
“While we haven’t seen a significant return of petrochemical-driven requirements, demand from a broader base of manufacturing users has strengthened,” Smith said. “In particular, chip manufacturers and data center manufacturers are driving demand.”
The implication for landlords is operational, not just aspirational. Power capacity has become a deal-breaker on assets that used to compete on rate and clear height.
“Delivery timing and available power are two of the most critical factors influencing tenant decisions today,” Smith said. “Buildings that can offer near-term occupancy and enhanced power capacity are seeing the strongest interest.”
Submarket performance within Houston reflects that shift. Smith pointed to South Belt as the runaway leader for user activity, while the Southeast/Port submarket has softened on a third-party logistics slowdown. Newmark data backs the divergence: the Southwest submarket led the metro with more than 2.1 million square feet of positive absorption in the quarter, while the Southeast posted negative 229,113 square feet despite holding 6.4 million square feet of the construction pipeline.
A record first quarter in DFW
In Dallas-Fort Worth, the demand profile is even more concentrated. Newmark reports that four of the top five leases signed during the quarter went to logistics and distribution tenants and Class A product captured 68 percent of total leasing activity, a 280-basis-point jump from the prior quarter. The market posted its highest first-quarter leasing volume on record at 21 million square feet.
The North Fort Worth submarket has become the construction story within that story. Newmark counted 8.8 million square feet underway there, 28.1 percent of the entire DFW pipeline, with five of the eight buildings over 750,000 square feet under construction in the submarket.
The concentration reflects where large-scale users can still find the land, highway connectivity and building scale required for modern distribution networks. As more occupiers consolidate operations into fewer, larger facilities, developers continue pushing toward the metro’s outer industrial corridors where mega-box product remains feasible.
Working through the wave in Central Texas
Austin’s situation is more complicated, according to Jeff Graves, Research Director for Austin and San Antonio at Cushman & Wakefield, who said the disconnect between healthy leasing and rising vacancy is largely a timing problem.
“Even with steady leasing activity, it hasn’t been enough to keep up with all the new buildings hitting the market,” Graves said. “The silver lining? Construction is starting to slow, which should give demand a chance to catch up and chip away at the excess supply over time.”
Austin’s industrial market is experiencing an unusual imbalance: the buildings tenants want most are also the ones driving vacancy higher. According to Graves, post-2020 product in Austin is sitting near a 34 percent vacancy rate while older inventory holds closer to 13 percent.
“The newer buildings are clearly the ones tenants prefer,” Graves said. “They’re seeing stronger leasing activity and are driving most of the market’s recent absorption, even if it’s not yet enough to fill all the new space that’s been added.”
Graves said more than 43 million square feet of new industrial space has come online in Austin since 2020, accounting for roughly 40 percent of total inventory, with another 4.5 million square feet still under construction and most of that slated for completion by the end of 2026.
“Absorption is projected to strengthen over the next three quarters as tenants who signed leases in the past year begin moving into their spaces,” Graves said. “Overall vacancy is expected to peak in the third or fourth quarter of 2026.”
South of Austin, San Antonio is evolving on a different industrial trajectory. The market posted 403,140 square feet of positive absorption in the quarter, per Newmark with the South submarket alone delivering 1.4 million square feet of occupancy gains.
“San Antonio’s industrial market has stayed pretty diverse in terms of who’s driving demand and what type of space they need,” Graves said. “There’s still solid activity from traditional 3PL users, but we’re also seeing more growth from the automotive sector, both on the distribution side and with light manufacturing.”
The pipelines look different and the vacancy curves look different, but the buildings winning deals across all four markets increasingly share the same traits: immediate occupancy, significant power capacity and the scale to accommodate manufacturing and infrastructure users that barely factored into Texas industrial demand a decade ago.
