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In Houston, Office Vacancy Declines But Deal Flow is Still Lagging
The Houston office market had 500K SF of positive absorption in the 3rd quarter, causing the vacancy rate to drip down to 23.7%. On the surface this is good news, but lease activity is down nearly 50% over the last quarter even as construction continues to ramp up. If these trends continue, new construction projects will do well as existing properties suffer, since new-build office towers command most of the market's lease activity.
What do these trends mean for current and prospective office tenants in Houston? Overall, the market looks like it will remain sluggish for the foreseeable future, but JLL reports that concessions have slowed a bit, and rents increased to $31.40/SF, so keep this in mind if you are on the lookout for new or additional office space.
Latest Development News
This section highlights some of the development news and completed projects to watch for in your market. For more information on market trends, rents and more visit our Houston or Austin City Pages.
Katerra recently abandoned their plans to construct a facility in the SMART Terminal Industrial Rail Park, and now plans on landing at the proposed Whisper development, also in San Marcos. In Houston, a 134,415-square-foot industrial development, named World Houston 44, officially broke ground. The development is located just minutes from George Bush Intercontinental Airport. In Katy, construction began on The Oaks at Mason Office Park, which will be located near the University of Houston campus. All office units will range from 1,320-6,600 SF and include two bathrooms, at least three offices, a reception area, a conference room, a break room and a kitchen.
Latest Leases Signed
This section highlights some of the leases signed and deal terms to watch for in your market. For more information on market trends, rents and more visit our Houston or Austin City Pages.
In Houston, PSC Industries Inc. recently signed a 72,319 SF industrial lease at 1903 Tellepsen Drive, while Spaces, an international workplace group, is expanding its Houston operations by opening a 60,000 SF coworking space in CityCentre. Also in Houston, Dallas-based law firm Shackelford Bowen McKinley & Norton has signed a 15,000 SF lease at 717 Texas.
Is it Better to Buy or Rent?
Should your company buy or rent space? We get this question quite often. On the commercial side of real estate, space is more expensive, so commitments are much longer, and liabilities are that much greater. Because of this, you should never put something under contract without a complete review and understanding of the full dynamics of what a purchase means for your business.
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Learn more about commercial real estate leasing and check out our latest blogs and our Leaning Center for awesome information, market trends, professional highlights, and more.
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