Kingwood/Humble Submarket Overview for Q22019

The Kingwood/Humble office market is relatively small with around 3.5 million SF of office/medical inventory but recent development of Grand Parkway which is Houston’s third loop has spurred growth in this community. With a vacancy rate of 11%, strong demographics and a short supply pipeline, the Kingwood/Humble submarket looks to be moving in the right direction. In order to inform you better on this area, below is our Kingwood/Humble submarket overview.

Lease Opportunities in Kingwood/Humble

Kingwood/Humble office overview

Generally speaking, leasing in Kingwood/Humble has been steady the last twelve months with the vacancy rate dropping from 12% to 11% as of third quarter 2019.

Overall, commercial properties in this submarket tend be smaller with the majority of tenants occupying less than 10,000 SF of office space. Specifically, Northeast Medical Tower II was one of the largest deliveries to note with a building size of 100,000 SF. Let’s take a look at some of the larger tenants in Kingwood/Humble:

  • Insperity – occupying 700,000 Square Feet
  • Humble Independent School District – occupying 90,000 Square Feet
  • Memorial Hermann – occupying 45,000 Square Feet

Without a doubt, we expect this submarket to keep performing well over the next 5 years. In addition, we expect it to continue to beat the metro Houston area with a vacancy rate of around 10%.

Asking Rents and What to Expect in Kingwood/Humble

Currently, rental rates in Kingwood/Humble are averaging $24.00/SF as of third quarter 2019. This is considered high for this particular submarket. Yet despite the higher rate, this market is still very competitive for smaller tenants. Especially those looking for commercial office space due to slowed rent growth over the past twelve months. What’s more, we see forecasts predicting 1%-2% annual increases in the next five years which follows the Houston metro trend.


As of third quarter 2019 Kingwood/Humble had 323,280 square feet of space under construction. Since its location is seen as an outlying office submarket, development is not as robust as other Houston markets. 90% of inventory is rated three stars or lower. On top of that, only 525,000 SF has been delivered since 2010. However, there have been some notable gains, especially related to medical/office properties. Let’s take a look at some recent commercial developments and office deliveries:

Recent Deliveries

  • Vital Heart & Vein – located at 18450 Eastex Freeway; 65,000 SF Building
  • Northeast Medical Tower II – located at 18980 North Memorial Drive; 100,000 SF Building

Currently Under Construction

  • Insperity Inc. – located at Kingwood Drive-270,000 SF Building; expected delivery June 2020
  • 215 Kingwood Executive Drive – 41,230 SF Building; expected delivery April 2020

Sales Activity

Kingwood/Humble office overview

Typical sales in Kingwood/Humble involve smaller commercial properties, usually under 50,000 SF and are traded between local investors. In general, limited turnover in this market is normal. So far, 2019 has seen less than a dozen transactions, all under 30,000 SF.

In January of this year, Kingwood Medical Center sold for $2.53 million ($211/SF) with a 7.5% capitalization rate. The 12,000 SF medical/office property was 60% leased at close of sale and was recorded as one of the highest prices of 2019. With an average price per square foot of $277 and average vacancy rate at the time of sale of 2.9%, this is a strong market for investors. Below are three other recent significant sales:

  • McKay Medical Plaza – Sold 2/8/2019 for $6,500,000 ($272/SF)
  • 2627 Chestnut Ridge Drive – Sold 1/18/2019 for $4,655,000 ($157/SF)
  • Plus 4 Credit Union Building – Sold 8/12/2019 for $3,350,000 ($150/SF)

At the moment, there is a lot of growth in Kingwood/Humble. Additionally, its suburban location and excellent demographics mean this market will continue to be advantageous for investors and smaller companies looking to lease office space. If you want to lease space in Kingwood/Humble, then we have brokers that can advise. Undoubtedly, our Houston area experts can help you find space and develop the best real estate strategy for your business. If you want more than a Kingwood/Humble office market overview, contact CXRE today!

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