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The developer underwrote rents at 54 cents per SF, and the demand-fueled scuffle drove rents up to 63 cents per SF, Vestal said Tuesday at the 2026 National Association of Real Estate Editors Conference.\u00a0<\/p>\n
\u201cOn a 1M SF building, a 9-cent increase is massive,\u201d Vestal said. \u201cSince we had that cat fight over that, we have three or four groups already ready to rock and roll on 1.2M SF that we’re going to do across the road.\u201d\u00a0<\/p>\n
The 1M SF building was ultimately leased to two tenants\u00a0that divided it into 600K SF and 400K SF. But more tenants like Walmart<\/a>, Ikea<\/a> and large energy companies are in the market for millions of square feet combined, Vestal said.\u00a0<\/p>\n Junction has a 400K SF building, two 700K SF buildings and another 1.2M SF building set to break ground in the next 30 days.<\/p>\n \u201cWe already have people knocking on our doors to backfill it,\u201d Vestal said.<\/p>\n Houston had 24.3M SF of industrial product under construction in the first quarter, the market\u2019s largest pipeline since 2023, a year of record-high deliveries<\/a>. Speculative projects accounted for 82% of the first quarter’s construction activity, underscoring developer confidence, a Cushman & Wakefield report states<\/a>.<\/p>\n Capital is flooding back to the Houston industrial development<\/a> market. Capital providers willing to give nonrecourse loans have come off the sidelines over the past year, creating more competition for privately capitalized developers<\/a> like Junction, Vestal said.<\/p>\n \n Bisnow\/Maddy McCarty\n <\/p>\n \n Cushman & Wakefield’s Christopher Thomson and Junction Commercial Real Estate’s Reed Vestal\n <\/p>\n \u201cWe’re starting to see people push the envelope in regards to land pricing and pushing the land pricing up,\u201d he said. \u201cI don’t think it’s a lack of capital. That is not the case anymore in the Houston or Dallas-Fort Worth markets. I think maybe too much money is coming to the market.\u201d\u00a0<\/p>\n Vestal wishes there were more constraints to lessen competition, he said.<\/p>\n The development rush could also present a problem if demand wanes. But for now, industrial tenant demand is keeping developer confidence sky-high.\u00a0<\/p>\n<\/p>\n