Houston Industrial Real Estate: Port-Driven Demand and Petrochemical Hub

Ross Matthews serves as senior vice president and market officer for Link Logistics in Houston, where he oversees warehouse and industrial properties across one of the nation's largest and most diversified markets. Ross helps businesses understand how Houston's port infrastructure, petrochemical industry and rapid population growth drive industrial real estate opportunities in the region. Link Logistics’ portfolio of Houston industrial properties serves companies ranging from construction suppliers and consumer goods distributors to petrochemical operations and port-related logistics providers. In this Q&A, Ross discusses Houston warehouse space for lease—the fundamental demand drivers, how the market responds to user needs and why the region’s pro-business environment continues to attract relocations.

What are the fundamental demand drivers for industrial real estate in Houston?

Ross: I generally summarize Houston with the three Ps: people, port and petrochemical.

First, population growth. Houston is the fifth-largest metropolitan statistical area in the U.S. and growing at about 100,000-plus people per year, which generates enormous need for consumption and warehouse space to satisfy the associated demand for goods. That population growth is projected to continue well into the future as well. 

Second, the Port of Houston. It's the nation's largest port complex by waterborne tonnage and in the top five by containers. The port creates massive demand for logistics real estate, industrial support services and warehouse operations.

Third, petrochemical. Houston is a global leader in chemical production and plastic resin manufacturing, which drives specialized industrial real estate demand throughout the region.

These three factors work together to create one of the most diversified and dynamic industrial markets in the country.

How does the Port of Houston impact industrial real estate demand?

Ross: In addition to being the nation's largest port by tonnage and in the top five for containers, it's the largest for foreign waterborne tonnage. That enormous port system requires an equally enormous support infrastructure—engineering, safety equipment, fasteners, fittings and valves and perpetual construction—which then drives demand for warehouse space. It's a global operation with growing trade with Asia, but especially key to Latin America and South America.

Another key advantage: Houston historically doesn't have labor strife or shortages at the port. It's a very reliable port for offloading vessels and getting them in and out efficiently. There's a strong relationship between the Port Authority and the longshoremen and unions, which is often taken for granted but incredibly important for logistics operations.

What role does the petrochemical industry play in Houston's warehouse market?

Ross: Most people know Houston for energy, but they often forget the petrochemical aspect. We have a full spectrum of petroleum operations—exploration, engineering, extraction, refining into fuels, and enormous chemical production. Upwards of 80% of all U.S. plastic resin is produced on the Gulf Coast, and Houston itself represents more than 40% of all the base petrochemical production in the United States. It's a huge component of our exports. We produce the raw material that goes abroad to be manufactured into plastic products.

That translates directly to our industrial market. Across much of the east side of town, the port and southeast submarkets, one of the largest industrial real estate uses is storage and packaging of plastic resin. That industry is unique and ever-expanding, which creates sustained demand for specialized warehouses and industrial facilities.

Can you explain Houston's industrial submarkets?

Ross: The northwest submarket is a primary focus for us at Link Logistics. That's where we're heavily positioned for last-mile distribution and servicing higher-income neighborhoods in the area. These households drive demand for same-day deliveries from Amazon, Walmart, Home Depot and similar retailers using just-in-time delivery models.

Farther north and northwest, you see major manufacturing operations. Daikin, the world's largest HVAC equipment manufacturer, operates a North American plant exceeding 4 million square feet. Foxconn is also a dominant occupier, using in excess of 3 million square feet in multiple buildings. Warehouse space throughout the submarket then supports finished goods distribution.

The east side of town and the port and southeast submarkets are dominated by port-related activity and petrochemical operations. That's where you see the plastic resin storage and packaging operations, along with all the support infrastructure for the Port of Houston.

Around the Texas Medical Center, you have specialized demand. The Texas Medical Center is the largest medical complex in the world. It's basically a city unto itself, surrounded by neighborhoods of medical professionals who are high consumers and value convenience. That creates specific warehouse demand patterns.

Then you have suburban communities throughout the market, generally affluent and consumption-oriented, creating distributed demand across the region.

What emerging trends should businesses know about in Houston?

Ross: Houston is a market with relatively low barriers to entry. We have an abundance of land, at least in outer areas; infill is more challenging. But our industrial market can respond very quickly to user needs—within months.

The focus recently has shifted to mid-size warehouses in the 100,000- to 250,000-square-foot range. Over the last five years, investors were building behemoth buildings—500,000 to 1.2 million square feet. The requirements and returns were there. But that's shifted. There's now more need for smaller spaces, and the market is responding.

For businesses seeking warehouse space for lease, Houston adapts quickly to where users want to be and the type of product they need. Understanding those changing requirements is critical for meeting demand.

Another trend: building attributes have essentially plateaued. Clear heights aren't getting taller, bay spacings aren't getting larger, truck courts aren't getting deeper. The functionality of buildings meets current market needs. In Houston, you don't see users or developers pushing beyond 40-foot clear heights. Truck courts have leveled off, with 185 feet typically adequate for trailer storage and dock use. Bay sizes of 50 to 60 feet are usually sufficient. There's no push to go larger or taller right now, because the current specifications work.

How does Link Logistics support companies looking for warehouse space in Houston?

Ross: We focus on reliability, professionalism and making real estate decisions easier for our customers. Customers can trust they'll be treated ethically and professionally. We work to make this aspect of their business reliable and consistent so they can focus on their core operations. We maintain our warehouse properties to a high standard and we provide continuity. We also build direct relationships with customers to make their jobs easier, and we work with brokers to solve challenges for them.

Many deals for Houston warehouse space are made by directors of real estate or people in similar roles, who then move on to other markets. If we do a good job in Houston, Link Logistics becomes an easy choice for when they're looking for space in other markets such as Dallas, Chicago or Atlanta. We try to identify where else customers operate and use relationships to grow across markets.

We monitor customer utilization to anticipate needs—if a user is maxed out on their current space, we survey and derive solutions in advance before losing them to the market. By identifying challenges and needs, we become a better partner and mitigate our own risk while also seizing opportunity to grow our business. 

Looking ahead, what makes Houston attractive for businesses?

Ross: Houston maintains a very pro-business environment. Texas in general—Houston, Dallas and Austin—ranks high nationally for growth in both population and business relocations. Major corporate relocations validate Houston's appeal. Chevron relocated their headquarters here from California. ExxonMobil moved from the Dallas area. Hewlett-Packard relocated here as well. 

When companies of this size relocate, it creates ripple effects. They need space themselves, their supplier networks need space and their employees drive local consumption demand. Construction is a huge user category—residential construction, plumbing supplies, mechanical supplies, building supplies. When you're building 25,000-plus homes per year, it takes significant warehouse space to support that activity.

Here's a telling statistic: 50% of recent deals over 20,000 square feet in our market are either expansions (37%) or new-to-market users (13%). Having half your deal activity represent incremental new space is a sign of a very healthy market. Our outlook for 2026 and beyond is really strong.

Explore available warehouse and distribution space in Houston to learn more about industrial real estate opportunities in the Central Region.