Episode Details

Houston's onshoring boom is hitting record levels.

Supply chains are reshuffling. Capital is flooding into industrial real estate in Texas. But construction costs just jumped 6.2%. Energy prices are up. Steel is up. Lumber is up. The economics of building new industrial capacity to support onshoring are getting crushed. Developers trying to build new face margin compression. A project that penciled at 8% returns six months ago is now looking at 4% or 5%. Some deals don't pencil at all anymore. But existing industrial assets? That's where the real play is.

Operators with existing industrial in Houston are capturing onshoring demand without construction risk. They're leasing existing space at premium rates to companies reshoring operations. Existing industrial assets are becoming scarce. Developers trying to build new capacity are facing construction inflation that's eating their returns. Smart money figured this out already. They're buying existing industrial in Houston, not developing new. Existing assets command premium pricing. New development gets delayed or repriced lower. The scarcity of existing industrial is real. And capital knows it. For operators in Houston right now, you need to understand your position.

Do you own existing industrial capturing onshoring demand? Or are you trying to develop new capacity at breakeven economics? Because the market is separating those two positions very clearly right now. Existing industrial in Houston is a goldmine. New development is a trap unless you can absorb construction inflation.

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