Houston office market reports

Q1 2024

Despite a strong Houston economy with 87k jobs created over the trailing 12 months through February 2024 and unemployment remaining relatively low at 4.4%, office space absorption hasn't kept pace. This disconnect is likely due to companies right-sizing and adopting remote or hybrid work models, leading to a reduced need for office space despite strong job growth, particularly in office-using sectors (62,800 new positions since the pre-pandemic peak).

However, leasing activity at Trophy properties continues to outperform the broader market. As the flight-to-quality trend persists and the construction pipeline remains nonexistent, this could lead to rent premiums and shrinking concessions in these properties due to the constrained supply of high-quality space options. Tenants are gravitating toward better-quality space to ensure that the luxuries employees experienced while working from home also exist in the office.
479k sf

Net absorption concentrated mostly in high quality product

While Trophy assets dominated office market activity, absorbing 479k square feet, Houston's overall office market saw a modest net absorption gain of 66k sf.

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 extended vacancy periods and potential conversion under future economic conditions.

2.4 msf

Leasing activity slows down

Tenants continue to demonstrate a strong preference for high-quality spaces, leading to well-capitalized owners dominating deal flow. However, overall leasing activity remains 36.5% below the 5-year pre-pandemic average.

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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