Houston office market report

Q3 2025

The Houston office market is showing broader signs of recovery as positive net absorption spreads across all asset classes. While trophy and Class A+ buildings remain strong, the “flight-to-quality” trend is beginning to moderate as vacancy tightens. In response, demand is shifting toward recently renovated Class A and even Class B properties, signaling a growing “flight-to-value” among tenants. Leasing activity is currently dominated by smaller deals, and renewals are rising amid limited new supply. With construction at a two-decade low and investment sales surging, Houston’s office landscape is evolving into a more balanced, value-driven environment for tenants and investors alike.

600k sf

Positive absorption spreads across all classes

Houston's office market recovery is beginning to spread across all classes, with nearly 600k sf of positive net absorption in Q3, bringing the year-to-date total to 1.1 msf. While trophy assets have led absorption gains so far, the “flight-to-quality” trend is beginning to moderate. With new supply remaining limited, recently renovated Class A buildings are now best positioned to capture the next wave of demand.

2.5 msf

Leasing activity in Q3 dominated by smaller deals

Overall leasing volume totaled 2.5 msf in Q3, bringing the year-to-date total to 8.8 msf. Demand continues to be driven by small to mid-sized tenants, with deals under 10,000 square feet accounting for 40% of all leasing activity year-to-date. This trend could shift as many companies having implemented return-to-office policies may soon require more space, especially if they downsized during the pandemic.

$2.2B

Office sales volume over trailing 12-months reaches 5-year high

Houston's office investment market has witnessed a significant surge in activity, with sales reaching an impressive $2.2 billion over the trailing 12 months. Private buyers and owner-users remain the most active buyer pool, capitalizing on heavily discounted pricing. This trend is expected to continue as more properties become available at attractive pricing.

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Get in-depth office market reports and insights from commercial real estate experts in the Greater Houston area. Avison Young advisors look at Houston commercial real estate activities and the latest Houston statistics to provide you expert market research on Houston's office properties.