Lovett Breaks Ground on Houston Hub Amid Industrial Market Shift

HOUSTON, TX – January 30, 2026 – As the Houston industrial market navigates a period of unprecedented new supply and sustained demand, Lovett Industrial and its partner PCCP, LLC have broken ground on a significant new project. The development, SouthPort 45, will add 668,077 square feet of Class A industrial space to the city's bustling Southeast submarket, a strategic move designed to capture the needs of modern logistics operators in a rapidly evolving landscape.

The three-building business park, situated on an 82-acre site at 13400 & 13500 Scarsdale Blvd, represents a calculated investment in a region that serves as a critical artery for U.S. commerce. With construction now underway, the project is slated for completion in the third quarter of 2026, aiming to deliver a state-of-the-art facility at a time when market dynamics are rewarding quality and location.

Fueling Houston's Economic Engine

SouthPort 45 is not being built in a vacuum. Its development is intrinsically linked to the economic vitality of the Port of Houston, which continues to break records and drive demand for nearby warehouse and distribution space. In 2025, Port Houston handled an impressive 4.3 million TEUs (Twenty-foot Equivalent Units), a 4.5% increase year-over-year that underscores its growing importance in global trade. The port's economic ripple effect is immense, supporting over three million jobs nationwide.

This project's location is its premier advantage. Offering immediate access to Beltway 8 and I-45, and sitting less than 15 miles from the Port of Houston, Hobby Airport, and the downtown core, it occupies a coveted logistics triangle. The demand for such prime real estate is fierce; properties within a 15-minute drive of the Port's busiest terminal have a razor-thin availability rate of just 5%. SouthPort 45 is positioned to directly answer that need.

“Southeast Houston continues to experience strong demand from users seeking well-located Class A product, and SouthPort 45 is designed to meet that need at scale,” said Nathan Benjaminov, Central & South Texas Market Lead at Lovett Industrial. “The project’s exceptional connectivity, deep labor pool, and varied building configurations and sizes will attract a wide range of tenants.”

Beyond logistics infrastructure, the project taps into Houston's robust demographic and economic growth. The metro area is forecast to add over 71,000 jobs in 2026, fueled by a young, diverse population and a famously pro-business environment that continues to attract both companies and talent.

The Rise of Class A Industrial

The term “Class A” signifies more than just a new building; it represents a new standard of functionality essential for today’s high-velocity supply chains. SouthPort 45 is designed to meet these exacting requirements with features that directly impact a tenant's bottom line. The development includes a large 395,657-square-foot cross-dock facility, ideal for high-volume distribution, alongside two smaller front-load buildings of 176,452 and 95,968 square feet, offering flexibility for a diverse tenant mix.

Key specifications include clear heights ranging from 32 to 36 feet, allowing for taller, more efficient racking systems that maximize cubic storage space—a critical factor for e-commerce and inventory-heavy businesses. The facilities will also feature modern, dock-high loading capabilities and ample interior circulation for truck courts, reducing congestion and speeding up turnaround times.

Furthermore, the buildings will be delivered in “move-in ready” condition, a significant advantage for tenants looking to become operational quickly. Each will include a 2,500-square-foot office, pre-installed warehouse lights, and dock levelers, minimizing the capital expenditure and time required for tenant build-outs.

Navigating a Shifting Market

The groundbreaking of SouthPort 45 comes at a pivotal moment for Houston’s industrial sector. After years of frenetic activity, the market is showing signs of normalization. A massive wave of new construction, totaling over 18 million square feet in 2025, has pushed the overall industrial vacancy rate to a new cycle high of around 7.3%. The Southeast submarket itself has seen significant new deliveries, contributing to a temporary imbalance of supply and demand.

However, these top-line figures belie a more nuanced reality. Despite the new supply, demand remains remarkably resilient. The market still recorded 3.6 million square feet of positive net absorption in the fourth quarter of 2025, and leasing activity in the Southeast submarket has been particularly strong. Crucially, average asking rents across the Houston market have continued to climb, increasing by approximately 41% over the past five years, a clear indicator that tenants are willing to pay a premium for high-quality, well-located space.

This environment creates a flight to quality, where modern, efficient, and strategically located projects like SouthPort 45 are expected to outperform older, less functional properties. Developers are betting that as construction starts begin to slow, the current supply will be absorbed, and rent growth will reaccelerate, particularly for Class A assets.

A Developer's Deepening Houston Footprint

For Lovett Industrial, SouthPort 45 is the latest chapter in an aggressive and focused expansion strategy within its home market. This project marks the Houston-based firm’s 12th industrial investment in the region, bringing its total portfolio of completed, under-construction, or acquired space to a staggering 9.8 million square feet. This deep commitment signals a long-term bullish outlook on the city's industrial future.

The project is a joint venture with PCCP, LLC, a national real estate investment firm with deep capital resources, lending further institutional credibility to the development. A robust team has been assembled to bring the project to fruition, with JLL handling marketing and leasing, Southside Bank and American National Bank of Texas providing construction financing, Harvey Cleary serving as the general contractor, and Powers Brown Architecture as the lead architect.

As construction equipment moves earth in Southeast Houston, the development of SouthPort 45 serves as a powerful symbol of the region's enduring appeal. It represents a forward-looking investment designed to meet the sophisticated demands of the modern economy, reinforcing Houston's status as a premier hub for logistics and commerce in the United States.