Midland’s industrial real estate market faced challenges in early 2024 but showed signs of recovery as the year progressed. While the market experienced a slowdown in the middle of the year, activity picked up in the final quarter, driven by renewed confidence in the oil and gas industry and increased leasing activity.
NRG Realty Group Vice President & Market Leader - Permian Tucker Schneemann contributed inflation and rising interest rates to a temporary lull in the market.
“Interest rates and inflation create significant issues in all lines of business, but mergers and acquisitions were ultimately the largest factor for service company performance in 2024,” Schneemann said. “As E&P operators changed hands, their vendors and contractors were instantly affected by the amount of work available throughout the Permian Basin.”
By midyear, however, the market began to pick up, and the final quarter saw a marked increase in leasing activity, particularly among service companies in the Permian Basin.
“As changes finalized, the real estate market became increasingly active in the second half of the year,” Schneemann said. “Transactions overall, both leasing and purchasing, improved drastically in Q3 of 2024, and saw consistent growth in Q4, setting up a dynamic market in 2025.”
Despite the uptick in activity, the availability of industrial properties remained stable throughout the year. As of late 2024, 150 industrial properties were available for lease. This number remained consistent even as new developments began to fill the demand for modern industrial space.
Schneemann said that the influx of new industrial properties played a key role in maintaining stability.
“One of the reasons for this is the success of new industrial development in our market, specifically in highly targeted corridors such as TX-349, TX-191, and Interstate 20,” Schneemann said. “As new construction becomes available, older industrial assets are left vacant.”