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Overall vacancy for medical office space in the Houston market is at 17.7%, up 130 basis points from 16.4% this time last year. In addition, office medical space recorded 1.3 million sq. ft. of leasing activity—which is comprised of both new leases and renewals—while net absorption (move-ins minus move-outs) is at negative 149,000 sq. ft.

 

Market Highlights

Vacancy at 17.7%. Overall vacancy for medical office space in the Houston market is at 17.7%, up 130 basis points from 16.4% this time last year. In addition, office medical space recorded 1.3 million sq. ft. of leasing activity—which is comprised of both new leases and renewals—while net absorption (move-ins minus move-outs) is at negative 149,000 sq. ft. So far this year, developments under construction stand at 1.3 million sq. ft., and deliveries are at 321,000 sq. ft. The average asking full-service rent is at $26.01 per sq. ft., up $0.20 from last year at this time, while Class A medical office space is averaging $31.12 per sq. ft., down from the prior period at $32.08 per sq. ft.

Vaccine maker breaks ground on headquarters facility. A gene therapy and vaccine maker has broken ground on a 240,000-sq.-ft. manufacturing and headquarters facility in the Houston area in the latest boost to the city’s life science sector. VGXI Inc. officially started construction on its new facility in Conroe. The Texas-based company, a wholly owned subsidiary of Seoul, South Korea-based GeneOne Life Science Inc., previously has said it was developing a coronavirus vaccine candidate. Construction of VGXI’s greenfield manufacturing facility is expected to take about a year with plans to be operational by Q1 2022.

Life science sector’s expanding presence. A new 180-acre medical mixed-use district is underway in a master-planned community in northeast Houston. Valley Ranch Medical District broke ground at the end of the third quarter within the 1,400-acre master-planned community of Valley Ranch, 29 miles northeast of downtown Houston in Montgomery County. The medical district is planned along the west side of Interstate 69 N between Farmto- Market Road 1314 and state Highway 99. Houston recently ranked No. 2 nationally by a global real estate services company for being an emerging life science cluster, ranking high for its increasing biotech research and development sector.


Leta Wauson
Director of Research
leta.wauson@naipartners.com
tel 713 275 9618

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