Avison Young report shows current economic climate continues to be favorable for tenantsOctober 6, 2020
Releases third quarter market reports for Houston industrial and office sectors
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Houston, TX – Avison Young today released its Third-Quarter 2020 Office and Industrial Market Reports for Houston. The industrial sector continues to outperform the office and other commercial real estate sectors, as is the trend across the country.
“Quoted office rates have not changed much from the previous quarter, but the effective rates, which include concessions like free rent and tenant improvement allowances, have seen a decline,” said Anthony Squillante, an Avison Young Principal based in the firm’s Houston office.
Although the industrial sector has faired better than other sectors during the pandemic, it is also facing some challenges, as concession packages are also now trending in the industrial space.
“Tenants are benefiting from lower effective rates on long-term leases specifically in new developments in submarkets where supply has outpaced tenant demand as landlords seek to stabilize their buildings quicker than other buildings within their competitive set,” said Drew Coupe, a Vice President in the firm’s Houston office specializing in industrial tenant representation.
Still, the relative stability of the industrial sector is, in part, bolstered by the surge of online shopping and demand for last-mile distribution facilities. This is potentially correlated to the increase in work-from-home policies that have resulted in the strain on the office market.
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