Houston office market reports
The Houston office market remains challenged due to high vacancy. Despite Houston’s economy reporting an upswing with unemployment dropping to 5.3% from 7.6% just a year ago, work-from-home policies have the potential to impact the amount of space leased and energy issues contribute to decreased leasing activity. Concessions continue to remain strong while quoted rates are declining. Flight-to-quality is a key trend, with the few new amenity-rich towers enjoying success, especially with competing international law firms who are leasing up the space. New construction is limited except in the medical office sector.
Flight-to-quality is the key trend among Houston’s office market. Limited development due to the large overhang of available space has older properties renovating and newer projects leasing up with a few firms developing their own new build-to-suit headquarters.
After suffering through eight quarters of negative absorption, the Houston market reverted back to positive absorption. This is primarily due to Hewlett Packard moving into its two new buildings and two other tenants moving into just opened space in Texas Tower, the newest multi-tenant skyscraper in downtown.
Direct asking rent
The direct asking rates have declined the last four quarters, even as landlords continue to offer strong concessions to attract tenants.
Slowly increasing available direct space has been the norm the last two years, although sublease decreased during 2020 and just recently started reporting an upswing.
This quarter saw the first minimal decline in the vacancy rate since the first quarter of 2020, when the overall vacancy was 19.8%.
Sales volume has slowed since the last half of 2021, but pricing has improved to $152 psf, up from $116 psf a year ago.
Your source for the latest Houston office market reports
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.
Explore different topics like the latest office market pricing trends and analysis of Houston's current office real estate market conditions. Gain a better understanding of Houston’s office real estate outlook and stay ahead of current office space trends. Make smart decisions when it comes to investing in office properties in Houston's competitive office real estate market. Avison Young is your trusted source for commercial real estate office market insights in Houston.
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