Widening gap between Houston's class A office base and net effective rents
The gap between base and net effective rents has widened significantly since the oil bust in 2015, increasing by 165.9% year to date. The gap between base and net effective rents remain significant due to highly competitive concession packages with generous rental abatement and tenant improvement allowances being offered. Since 2014, tenant improvement allowances have risen by 56.9% to an average of $72.99 per square foot, while free rent periods have significantly increased from 5.5 months to 11.8 months on a typical 10-year new deal.
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