Houston office market reports

Q4 2023

The economy for the Houston metro area has performed quite well during the fourth quarter of 2024 with 78k jobs created over the trailing 12 months ending November 2023. Further, unemployment in the Bayou City remains relatively low at 4.1%. Despite a remarkable 10% growth in office-using jobs, with 70,000 new positions added since its pre-pandemic peak, there has not been a direct correlation in office absorption as companies continue to right-size and become more efficient with their office space footprints likely due to remote and hybrid work arrangements.

Leasing activity in Trophy and class A+ properties continue to outperform the broader market. As the flight to quality trend persists and the construction pipeline remains non-existent, this could lead to rent premiums and shrinking concessions in these properties as a result of the supply of high-quality space options being constrained. Tenants are gravitating to better quality space to ensure that the luxuries employees experienced while working from home also exist in the office.

671k sf

Net absorption concentrated mostly in high quality product

While Trophy and class A assets dominated office market activity, absorbing 671k square feet, Houston's overall office market saw a net loss of 410k square feet in 2023.

12.2%

Vacancy in product built since 2010 continues to outperform

The Houston office market struggles with high vacancy rates but shows promise for recovery, with newer buildings performing better and older vintage assets facing potential conversion under future economic conditions.

-28.9%

Leasing activity slows down

Leasing velocity plummeted during the second half of 2023 due to the tightening financial conditions and economic slowdown, but large upcoming leases might revive the market in 2024.

Download the 2023 Q4 Houston Office Market Report

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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