Industrial market soars; office market experiences flight-to-quality

Houston, TX – Avison Young today released both its Second Quarter 2022 Office and Industrial Market Reports for Houston. The Houston industrial market’s momentum continues with increased levels of absorption and leasing activity while the office market’s leasing activity has declined since 2018, posting another record low during second quarter.
Drew Coupe, Principal in the firm’s Houston office specializing in industrial tenant representation, said, “Rising interest rates and high demand will continue to push rents up through the next quarter. Asking rental rates have slowly risen each quarter during the last 18 months, increasing to break last quarter’s record.”
“The Houston office market remains sluggish, but the bright spot is the continued flight-to-quality trend,” said Rand Stephens, Principal and Managing Director of the firm’s Houston office. “The market is still feeling the effects of the ongoing consolidation in the energy industry combined with companies generally being more efficient in how they use office space.”
With respect to Houston’s office sector, Anthony Squillante, Principal in the firm’s Houston office specializing in office tenant representation said, “One paradigm that has continued to gain strength over the last several years and remained evident throughout 2022 is the dichotomy in performance of class A versus class B space as well as newer, class A versus older, class A buildings. As employers seek to create exciting work environments encouraging their work force back into the office, we will see the bulk of future leasing activity in well-located, highly amenitized buildings.”