Houston office market report

While employment gains are moderating from the rapid rebound immediately following COVID, Houston’s economy continues to demonstrate strength, with 62,500 jobs created over the trailing 12 months ending November 2024. Furthermore, the unemployment rate in the Bayou City remains relatively low at 4.5%. Businesses that are reliant upon office space have seen significant growth, with nearly 11% more jobs since its pre-pandemic peak. Yet, this robust job creation hasn’t directly correlated into a surge in office space demand, likely due to companies becoming more efficient with their footprints.

The Houston office market is showing promising signs of a recovery, with trophy and class A+ properties leading the way. The flight-to-quality trend remains strong, and with limited new construction underway, these top-tier spaces could potentially begin commanding higher rents and providing fewer concessions.  As a result, future demand will likely begin to shift towards the next tier of buildings that are well maintained and have undergone renovations over the past decade, offering a more cost-effective alternative.