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Houston Office Commercial Real Estate Market Data and Economic Information - Four Oaks Place

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Vacancy in the Houston office market dropped 60 basis points year-over-year, reaching its current rate of 21.5%. The amount of vacant office space on the market is approximately 50.7 million sq. ft. Net absorption is in the red at negative 438,000 sq. ft.—though still an improvement compared to this point in time in 2018.


Market Highlights

Vacancy rate at 21.5%. Vacancy in the Houston office market dropped 60 basis points year-over-year, reaching its current rate of 21.5%. The amount of vacant office space on the market is approximately 50.7 million sq. ft. Net absorption is in the red at negative 438,000 sq. ft.—though still an improvement compared to this point in time in 2018, when the year-to-date total was more than negative 2.0 million sq. ft. Of the 1.6 million sq. ft. currently under construction, about 66% of that space is available for lease.

Relocations in the Galleria. 1360 Post Oak, a 25-story, 496,608-sq.-ft., Class A office tower has new tenants to add to its roster. Engie, a French energy utility company, subleased 112,024 sq. ft. from BHP Billiton in the Galleria/West Loop submarket. Engie will occupy the fourth through ninth floors and will move into the building in December. In addition, commercial real estate firm NAI Partners subleased 20,143 sq. ft., occupying the entire 19th floor, with plans to move into the building in mid-September. Other tenants in the building include Stewart Title subleasing 156,000 sq. ft., and Sheridan Production Co. subleasing 59,000 sq. ft., with both transactions taking place in 2018.

Job growth accelerates. Preliminary jobs data for Houston continue to be strong in 2019, and the labor market remains tight. Employment growth accelerated from 3.3% over the three months ending in May to 3.6% over the period ending in June. Metro job growth was 2.9% from June 2018 to June 2019 (89,650), with the largest number of jobs created in professional and business services. Houston’s unemployment rate rose from a historic low of 3.4% in May to 3.6% in June. The unemployment rate in Texas dropped to a record low of 3.4%, and U.S. unemployment was 3.7%.

Houston Office Commercial Real Estate Market Data and Economic Information - Market Activity table

Houston Office Commercial Real Estate Market Data and Economic Information - Under Construction graph

Houston Office Commercial Real Estate Market Data and Economic Information - Supply and Demand graph


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

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