Avison Young releases Third Quarter 2023 Office Market Report for Houston
October 10, 2023
Trophy and class A product leading in recovery
Houston, TX – Avison Young today released its Third Quarter 2023 Office Market Report for Houston. Houston’s metro economy has performed quite well, with 88,000 jobs created over the trailing 12 months ending in August 2023, while unemployment remains relatively low at 4.8%. Strong office job growth has helped buoy the market, but a disconnect has emerged between office job growth and office demand. “Companies continue to streamline and upgrade their office space as remote and hybrid work become increasingly common,” said Wade Bowlin, Principal and Managing Director of the firm’s Houston office. “As a result, leasing activity in trophy and class A properties continues to outperform the broader market accounting for 83% of leasing activity in 2023.” Older vintage assets are battling the effects of the flight-to-quality trend and hybrid work model, as vacant space in buildings built prior to 2000 accounts for nearly 80% of all vacancy. As a result, tenants will maintain the upper hand in negotiating lower rents and attractive concessions within these assets. Principal and office tenant representation specialist Anthony Squillante stated, “Tenants are seeing highly competitive concession packages with generous rental abatement and improvement allowances. This is ideal timing for companies to secure office space.”
Avison Young creates real economic, social and environmental value as a global real estate advisor, powered by people. As a private company, our clients collaborate with an empowered partner who is invested in their success. Our integrated talent realizes the full potential of real estate by using global intelligence platforms that provide clients with insights and advantage. Together, we can create healthy, productive workplaces for employees, cities that are centers for prosperity for their citizens, and built spaces and places that create a net benefit to the economy, the environment and the community.
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