Port Houston | Market Report Q3 2026

OVERVIEW

 

PORT HOUSTON: DRIVING INDUSTRIAL AND LOGISTICS DEMAND
Port Houston continues to serve as a critical gateway for international trade and one of Southeast Houston's most important long-term industrial demand drivers. Its scale, multimodal connectivity, diverse cargo base, and continued infrastructure investment support logistics, distribution, manufacturing, energy, and import and export activity throughout the region.

 

CHANNEL CAPACITY AND TERMINAL EFFICIENCY
The 52-mile Houston Ship Channel remains the foundation of Houston's maritime economy and the nation's largest port complex by waterborne tonnage. Trade activity remained strong through Q3 2026, with Houston Ship Channel exports increasing 21% year over year through July and total tonnage increasing 15%. Crude oil exports were up 40% year to date, while Houston accounted for 31% of U.S. waterborne exports of crude oil and refined products. Port Houston's public terminals also demonstrated continued stability.

 

MARKET CONDITIONS
Port-driven activity continues to anchor industrial demand within Southeast Houston, the region's most strategically important logistics corridor. As of Q2 2026, the submarket totaled approximately 86.3 million square feet of inventory, with direct vacancy at 11.3% and weighted NNN asking rents averaging $0.73 per square foot. Although vacancy has increased as recently completed speculative projects enter the market, leasing activity and net absorption continue to reflect healthy demand from logistics, manufacturing, and distribution users tied to Port operations. Looking ahead, Southeast  Houston remains one of the nation's most strategically positioned industrial submarkets. Continued Port Houston investment, resilient trade activity, and long-term population and economic growth are expected to support industrial demand as newly delivered space is absorbed through the balance of 2026.

 

PORT HOUSTON’S GROWTH CONTINUES TO TRANSLATE DIRECTLY INTO INDUSTRIAL DEMAND, POSITIONING SOUTHEAST HOUSTON AS ONE OF THE MOST STRATEGICALLY IMPORTANT LOGISTICS CORRIDORS IN THE U.S.

PORT HOUSTON

+ $986.9 BILLION
Annual U.S. economic value
+ 3.53 MILLION
U.S. jobs supported
+ $537.7 BILLION
Annual Texas economic value
+ 1.89 MILLION
Texas jobs supported

HOUSTON SHIP CHANNEL

+ 52 MILES
Houston Ship Channel
+ 40%
Crude oil exports YTD
+ 31% U.S.
Waterborne crude oil and
refined-product exports
+ 15%
YTD total tonnage after July 2026

"PORT HOUSTON CONTINUES TO CREATE OPPORTUNITIES THROUGHOUT SOUTHEAST HOUSTON. WE'RE SEEING STEADY CARGO ACTIVITY, CONTINUED INFRASTRUCTURE INVESTMENT, AND STRONG DEMAND FROM COMPANIES THAT WANT TO BE CLOSE TO THE PORT. THAT COMBINATION KEEPS THIS CORRIDOR ACTIVE AND WELL POSITIONED FOR CONTINUED GROWTH"
JUSTIN TUNNELL, SIOR
PRINCIPAL

 

 

 

PORT HOUSTON INFRASTRUCTURE

PROJECT 11 – PROJECT 12
HOUSTON SHIP CHANNEL: BUILDING FOR THE NEXT PHASE

 

PROJECT 11 REACHES A MAJOR MILESTONE
Project 11, the Houston Ship Channel Expansion, has reached a significant milestone with Port Houston's portions of the project now complete. The expansion represents one of the region's most important infrastructure investments, improving navigation, vessel efficiency, and the long-term capacity of the Houston Ship Channel. The expanded Channel strengthens Port Houston's ability to accommodate larger vessels and provides greater operating flexibility for container, energy, bulk, and other maritime users. These improvements reinforce the infrastructure supporting Houston's role as one of the nation's leading trade, energy, and industrial gateways.

 

PROJECT 12 LOOKING AHEAD
Planning for the next generation of Houston Ship Channel improvements is already underway. Project 12 remains in the early evaluation stage, following federal authorization to study additional Channel improvements. Port Houston and the U.S. Army Corps of Engineers have approved a cost-share agreement to begin a navigation feasibility study. The proposed project would focus primarily on additional Channel deepening, with the goal of improving vessel economies of scale and supporting future maritime growth. No study timeline has been established.

 

TERMINAL INVESTMENT CONTINUES
Infrastructure investment is also continuing at Port Houston's public terminals. During Q3 2026, the Port advanced reconstruction of Wharves 5 and 6 at Barbours Cut Terminal to accommodate larger cranes and vessels, while additional Bayport and Barbours Cut expansion projects continued to move forward. Four additional ship-to-shore cranes were also commissioned at Bayport, bringing the terminal's operating fleet to 21 ship-to-shore cranes.

WHY THIS MATTERS FOR INDUSTRIAL REAL ESTATE
Continued investment in Channel and terminal capacity strengthens the infrastructure supporting Southeast Houston's logistics, distribution, manufacturing, and port-oriented industrial users. As Port Houston prepares for future cargo growth, expanded maritime capacity and terminal efficiency should continue to reinforce long-term industrial demand throughout the Southeast corridor.

 

 

 

PORT HOUSTON TEUs

 

Port Houston continued to demonstrate consistent container activity through August 2026, handling 373,756 TEUs during the month, up 1% year over year. Through the first eight months of 2026, total container volume reached nearly 3.0 million TEUs, also increasing 1% compared with the same period in 2025.

 

Import activity continues to provide momentum. Loaded container imports increased 5% year to date, supported by machinery and electronics, retail consumer goods, furniture, automotive products, and apparel. East Asia remained an important source of import growth, increasing 12% and accounting for 57% of loaded container imports. Loaded exports declined 1% year to date, resulting in a relatively balanced overall container environment.

Port Houston's international connectivity also continues to expand. In September, the Port welcomed the first vessel in Crowley's new weekly container service connecting Houston with Central America, providing shippers with additional access to key international markets.

Looking ahead, Port Houston's diversified cargo base, expanding trade connections, and continued investment in terminal and Channel infrastructure provide a strong foundation for future container activity. For Southeast Houston's industrial market, consistent cargo volumes continue to support demand from logistics, distribution, manufacturing, and other port-oriented users.

 

 

 

OVERALL SUBMARKET STATISTICS

 

WHAT COULD IMPACT PORT-DRIVEN DEMAND
+ Global trade policy, tariffs, and geopolitical conditions affecting cargo flows
+ Timing and composition of future Port Houston infrastructure investment
+ Lease-up of recently delivered speculative space and future development activity
+ Changes in global supply chains, shipping routes, and manufacturing investment

SOUTHEAST SUBMARKET

Southeast Houston delivered an exceptional quarter during Q3 2026, reinforcing its position as one of the region's most important industrial and logistics corridors. Total distribution inventory reached approximately 87.6 million square feet, while direct vacancy declined sharply to 7.6%, down from 11.3% in Q2 2026. The improvement reflects substantial tenant activity and continued absorption of recently delivered speculative space.

Quarterly leasing activity reached approximately 3.4 million square feet, bringing year-to-date leasing to 6.4 million square feet. Net absorption totaled approximately 3.7 million square feet during Q3 2026, the highest of any Houston industrial distribution submarket, while year-to-date absorption reached approximately 5.8 million square feet. Major transactions, including Tesla's two leases totaling more than 2.0 million square feet, contributed significantly to the quarter's performance.

Development remains active but increasingly measured. Approximately 1.2 million square feet delivered during Q3 2026, with 69.2% preleased, while another 2.7 million square feet remains under construction. The combination of improving vacancy, substantial absorption, and continued development demonstrates the depth of demand within the Port Houston corridor.

 

CITYWIDE MARKET

Houston's industrial distribution market also strengthened during Q3 2026. Direct vacancy declined to 5.2%, while quarterly net absorption reached approximately 10.0 million square feet. Year-to-date absorption reached 23.1 million square feet. Year-to-date absorption now slightly exceeds the 23.1 million square feet delivered through the first nine months of 2026.

Leasing activity totaled approximately 10.4 million square feet during Q3 2026 and 24.2 million square feet year to date. At the same time, the construction pipeline moderated to approximately 13.5 million square feet, reflecting a more selective development environment as recently completed space continues to lease.

Southeast Houston played an outsized role in these citywide results, accounting for approximately 33% of Q3 2026 leasing activity and 37% of quarterly net absorption. Its performance reinforces the connection between Port Houston, major transportation infrastructure, and Houston's broader industrial demand.

 

 

 

MAJOR U.S. PORT UPDATE

Major U.S. container ports posted mixed results during August 2026 as cargo activity varied considerably across the nation's largest gateways. Port Houston handled 373,756 TEUs, increasing 1% year over year, while several major East and West Coast ports recorded declines.

Among the ports tracked, Long Beach posted the strongest year-over-year growth at 2%, while Los Angeles remained essentially flat. New York/New Jersey declined approximately 4%, Savannah decreased 1%, Seattle/Tacoma fell 8%, and Oakland declined approximately 10%. Virginia recorded the largest decrease at approximately 28%.

For Houston, the more important story is consistency rather than short-term volatility.

Port Houston's August increase follows continued stability in container volumes throughout 2026, with total container activity reaching nearly 3.0 million TEUs through August and increasing approximately 1% year over year. Loaded imports increased 5% year to date, providing additional support to overall container activity.

Houston's diversified cargo base also differentiates the region from container-only comparisons. Beyond containers, the Houston Ship Channel continues to handle significant energy, petrochemical, steel, bulk, and manufacturing-related cargo, reinforcing its broader role within U.S. trade and industrial supply chains.

Looking ahead, changing trade policies, geopolitical conditions, and shipping patterns may continue to create monthly volatility across U.S. ports. Port Houston's diversified cargo base, expanding infrastructure, and Gulf Coast location provide a strong foundation for continued trade activity and long-term industrial demand throughout Southeast Houston.

 

 

 

 

PORT HOUSTON ACTIVITY UPDATE

 

Port Houston continued to demonstrate steady container activity through August 2026, processing 373,756 TEUs during the month, up 1% from August 2025. Year-to-date container volume reached approximately 3.0 million TEUs, also increasing 1% year over year. Loaded imports remained a key source of momentum, increasing 5% year to date, while loaded exports declined 1%.

Cargo performance was mixed across major categories, highlighting the diversity of Port Houston's trade base. Steel emerged as a significant Q3 2026 story, with total steel tonnage increasing 49% year over year in August 2026 to 529,084 tons, driven primarily by a 54% increase in steel imports. General cargo increased 22% year to date, while total tonnage at Port Houston's public terminals remained essentially unchanged through August.

At the broader Houston Ship Channel level, trade activity remained strong. Total tonnage increased 15% year to date through July 2026, led by a 21% increase in exports. Crude oil exports increased 40% year to date, reinforcing the Channel's importance to Houston's energy and industrial economy.

For industrial real estate, the continued mix of container, energy, steel, and general cargo activity reinforces Southeast Houston's role as a diversified logistics and industrial corridor. Port Houston's ability to serve multiple cargo categories provides demand support beyond container volumes alone.

Port Houston continued to demonstrate steady container activity through August 2026.

LOADED IMPORTS

+5% YTD

 

AUGUST 2026 - TEUS

+ Import 189,151

+ Export 184,605

+ Total 373,756

Port Houston continued to demonstrate steady container activity through August 2026

 

IMPORT TONNAGE PERFORMANCE AUG 2025/AUG 2026

+ General -13%

+ Steel +54%

+ Dry Bulk +100%

+ Liquid Bulk +13%

+ Container +6%

TOTAL IMPORT +32%

 

EXPORT TONNAGE PERFORMANCE AUG 2025/AUG 2026

+ General -74%

+ Steel -9%

+ Dry Bulk -80%

+ Liquid Bulk -1%

+ Container +1%

TOTAL EXPORT -32.6%

 

 

TEXAS PORTS

THE BIG PICTURE

Texas leads the nation in waterborne cargo, with 23 maritime ports handling nearly 750 million tons annually.

Texas' maritime system is one of the nation's most significant trade and transportation networks, connecting the state's energy, manufacturing, agricultural, and consumer markets with destinations around the world. Collectively, Texas' 23 maritime ports handle nearly 750 million tons of cargo annually, more than any other state.

Six Texas ports rank among the top 20 U.S. ports by total tonnage: Houston, Corpus Christi, Beaumont, Port Arthur, Texas City, and Port Freeport. Houston, Corpus Christi, and Beaumont rank among the nation's top five, demonstrating the extraordinary concentration of maritime activity along the Texas Gulf Coast.

While these ports share access to the Gulf Coast, their cargo profiles and economic roles differ considerably. Houston combines container activity with energy, petrochemical, manufacturing, steel, and general cargo; Corpus Christi is a major crude oil and energy-export gateway; and Beaumont, Port Arthur, Texas City, and Freeport support significant energy, petrochemical, bulk, breakbulk, and industrial cargo activity.

Together, the ports form a complementary maritime network supporting industrial activity throughout Texas rather than a collection of identical competing gateways.

TERMINAL MODERNIZATION AND OPERATIONAL EFFICIENCY REINFORCE PORT HOUSTON'S LONGTERM COMPETITIVE POSITION WHILE SUPPORTING RELIABLE CARGO MOVEMENT THROUGHOUT THE GULF COAST

23
Texas Maritime Ports

 

750M Tons
Annual Waterborne Cargo

 

6
Texas Ports Among U.S. Top 20 by Tonnage

 

 

 

 

INTERNATIONAL IMPORT TRADE

 

IMPORT DYNAMICS
East Asia continued to lead import growth, with loaded container imports from the region increasing 12% year to date and accounting for approximately 57% of Port Houston's loaded container imports.

 

Machinery and electronics, resins and plastics, chemicals and minerals, and consumer goods were among the major categories contributing to import growth.

Steel also emerged as an important Q3 2026 import story. Steel imports increased 54% year over year in August to 502,965 tons, producing the strongest month for steel activity since August 2025. While steel imports remained down 11% year to date, the August increase represents a notable improvement in recent activity.

 

WHAT THIS MEANS FOR INDUSTRIAL REAL ESTATE
The continued flow of imported machinery, electronics, consumer goods, steel, and other industrial products supports a broad range of real estate requirements throughout Southeast Houston. Distribution facilities, cross-dock buildings, manufacturing space, transload operations, storage yards, and other port-oriented properties all benefit from the movement of goods between Port Houston and the broader regional market.

Port Houston's diverse import base also helps reduce reliance on any single commodity or trade partner, supporting the long-term importance of Southeast Houston within regional and national supply chains.

Import and Export Q2 Port Report maps - 1

 

 

 

INTERNATIONAL EXPORT TRADE

 

Houston's export activity continues to reflect the region's position as one of the nation's leading energy, petrochemical, and manufacturing centers. Through July 2026, Houston Ship Channel export tonnage increased 21% year over year to approximately 125.5 million short tons, demonstrating the scale of goods moving from Houston to global markets.

 

ENERGY EXPORTS DRIVE GROWTH

Energy remains the dominant Q3 export story. Crude oil exports through the Houston Ship Channel increased 40% year to date, while Houston accounted for approximately 31% of U.S. waterborne exports of crude oil and refined products and more than 21% of total U.S. waterborne export tonnage. These figures reinforce the Houston Ship Channel's role as one of the country's most important energy export gateways.

CONTAINER EXPORTS
Container exports presented a different picture. Through August 2026, loaded container exports totaled approximately 1.06 million TEUs, down 1% year over year, compared with the stronger growth occurring in loaded imports.

That distinction is important. We don't want to imply that every export category is booming simply because total Houston Ship Channel export tonnage is up 21%. Energy is driving much of the tonnage growth, while container exports remain relatively stable.

WHAT THIS MEANS FOR INDUSTRIAL REAL ESTATE

Houston's export network supports a broad range of industrial real estate demand extending beyond traditional distribution facilities. Manufacturing plants, petrochemical facilities, storage and terminal operations, rail-served properties, outdoor storage, logistics facilities, and other port-oriented industrial uses all benefit from access to the Houston Ship Channel.

Import and Export Q2 Port Report maps - 2

 

 

 

FOREIGN TRADE ZONE

 

A Foreign Trade Zone (FTZ) is a designated area that U.S. Customs and Border Protection treats as outside U.S. customs territory for tariff and duty purposes. This designation provides companies engaged in international trade with greater operational flexibility and potential cost advantages, supporting trade, logistics, and manufacturing activity within the U.S.

 

KEY BENEFITS

+ Merchandise may enter the zone without formal customs entry

+ Duties and certain federal taxes are assessed only when goods enter U.S. commerce

+ No duties are paid on goods that are re-exported

+ Potential relief from select quotas and trade restrictions, depending on product type

 

PORT HOUSTON FTZ 84

FTZ 84 encompasses Port Houston and is one of the largest FTZ networks in the United States, supporting logistics, distribution, manufacturing, petrochemical, and energy industries.

+ Duty and tariff efficiencies, including elimination of duties on reexported goods

+ Streamlined customs processing and improved inventory control

+ Direct access to the Houston Ship Channel and strong regional connectivity via highway, rail, and air cargo networks

 

HOW IT WORKS

+ Goods entering an FTZ are not immediately subject to U.S. customs duties

+ Duties are paid only when goods leave the zone and enter U.S. commerce

+ Goods exported directly from the FTZ are not subject to U.S. duties

 

 

 

KEY TAKEAWAYS FOR INDUSTRIAL REAL ESTATE

PORT-DRIVEN DEMAND REMAINS A MAJOR FORCE IN SOUTHEAST HOUSTON
Southeast Houston recorded approximately 3.7 million square feet of net absorption during
Q3 2026, representing roughly 43% of Houston's quarterly distribution absorption, while direct
vacancy improved to 7.6%.

THE HOUSTON SHIP CHANNEL'S ECONOMIC REACH EXTENDS FAR BEYOND THE PORT
Marine cargo activity along the Houston Ship Channel supported approximately $986.9
billion in annual U.S. economic value and 3.53 million jobs in 2025, reinforcing the scale of the
industrial ecosystem connected to Houston's maritime economy.

PORT HOUSTON'S DIVERSE CARGO BASE SUPPORTS MULTIPLE INDUSTRIAL SECTORS
Stable container activity, strengthening steel imports, and growing energy exports support
demand from distribution, logistics, manufacturing, storage, transportation, and other port-oriented
industrial users. Loaded container imports increased 5% YTD, August steel imports
increased 54% year over year, and Houston Ship Channel crude oil exports increased 40% YTD.

IMPORT AND EXPORT ACTIVITY IS CREATING DIFFERENT REAL ESTATE DEMAND DRIVERS
Loaded container imports increased 5% year-to-date, supporting distribution and consumer-oriented
logistics demand, while Houston Ship Channel export tonnage increased 21%, led
by strong energy exports. Together, these trade flows support a broad mix of warehouse,
manufacturing, storage, terminal, and transportation-related real estate requirements.

INFRASTRUCTURE INVESTMENT IS PREPARING THE PORT FOR FUTURE GROWTH
With Port Houston's portions of Project 11 complete, planning for Project 12 underway, and
continued investment at Bayport and Barbours Cut, Houston is expanding both waterside and
landside infrastructure to support future trade activity.

PORT HOUSTON'S STABILITY STANDS OUT IN A VOLATILE TRADE ENVIRONMENT
Port Houston handled nearly 3.0 million TEUs through August 2026, up 1% year over year, while
several major U.S. container gateways recorded year-over-year declines. Houston's diversified
cargo base and expanding international connections provide additional resilience as global
trade patterns continue to shift.

 

 

 

ABOUT LEE & ASSOCIATES

INDUSTRIAL ADVISORS

 

MIKE SPEARS, SIOR,CCIM
MANAGING PRINCIPAL
MASON ALSBROOKS, SIOR, CCIM
EXECUTIVE PRINCIPAL
THOMAS LEGER, SIOR
EXECUTIVE PRINCIPAL
PRESTON YAGGI, SIOR,CCIM
EXECUTIVE PRINCIPAL
CHASE CRIBBS, SIOR
PRINCIPAL
RICHARD GLASS, SIOR
PRINCIPAL
JUSTIN TUNNELL, SIOR
PRINCIPAL
PATRICK WOLFORD, SIOR, CCIM
PRINCIPAL
STEPHEN KUPER
VICE PRESIDENT
CLINT HANKLA
SENIOR DIRECTOR
AUSTIN DABBS
DIRECTOR
MATTHEW CLAY
DIRECTOR
TROY COLLINS
DIRECTOR
ANDRES CREXIELL
DIRECTOR
JASON ENGLISH
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JOHN GAZZOLA
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JEFF KUPER
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THOMAS MONAGHAN
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STUART PETERSON
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CONRAD CHAMBERS
ASSOCIATE
MATT JORGENSEN
ASSOCIATE
TANNER KINCANNON
ASSOCIATE
ANDREW MCGUIRE
ASSOCIATE
MARCO MILOSAVLJEVIC
ASSOCIATE
FELIPE RODRIGUEZ
ASSOCIATE
CHASE TAYLOR
ASSOCIATE

 

OFFICE ADVISORS

 

CHRIS LEWIS, SIOR
MANAGING PARTNER
BILL INSULL, CCIM
PRINCIPAL
DREW LEWIS
PRINCIPAL
TRAVIS TAYLOR
PRINCIPAL
BLAKE R. VIRGILIO, SIOR, CCIM
PRINCIPAL
WADE BOWLIN
EXECUTIVE VICE PRESIDENT
COURTNEY BUCKOUT
DIRECTOR
BLAINE SINCLAIR
DIRECTOR
JEFF CHARBONNEAU
ASSOCIATE
ERIK JORGENSEN
ASSOCIATE
MAX WELCH
ASSOCIATE

RETAIL ADVISORS

 

BRANDI DEES
SENIOR VICE PRESIDENT
MCKAILY CARPENTER
ASSOCIATE

 

CAPITAL MARKET ADVISORS

 

JASON DANNATT

CHRIS DANNATT

TOBY KETTLE

 

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