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Houston Commercial Real Estate Office Market Data and Economic Information - Houston Downtown CBD

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Nearing the end of 2019, overall vacancy is at 21.5% and availability is at 26.0%, both up slightly from this time last year. The Houston office market has recorded 14.5 million sq. ft. of leasing activity—which is comprised of both new leases and renewals—while net absorption (move-ins minus move-outs) year-to-date is at -109,780 sq. ft., down from 629,000 sq. ft. year-over-year.


Market Highlights

Vacancy hovers around 21%. Nearing the end of 2019, overall vacancy is at 21.5% and availability is at 26.0%, both up slightly from this time last year. The Houston office market has recorded 14.5 million sq. ft. of leasing activity—which is comprised of both new leases and renewals—while net absorption (move-ins minus move-outs) year-to-date is at -109,780 sq. ft., down from 629,000 sq. ft. year-over-year. Developments under construction and delivered projects have outpaced December 2018 year-to-date numbers. The Houston average asking full-service rent is at $29.54 per sq. ft., while Class A direct space in the Central Business District is averaging $45.52 per sq. ft.

Kiewit’s real estate expansion. Although future uncertainty persists, deals are still getting done in Houston. Of the 14.5 million sq. feet of leasing activity so far this year, the Energy Corridor submarket ranked number three, assisted by Kiewit Engineering’s upcoming move and 63,000 sq. ft. expansion. The lease is for 171,266 sq. ft. in Energy Center I at 585 N. Dairy Ashford. Kiewit signed the lease in Q3 2019 and plans to move into the building in Q3 2020. The company is currently leasing about 100,000 sq. ft. in Energy Tower IV, located at 11750 Katy Freeway. The vacancy rate in the Energy Corridor sits at 28.4%.

Houston tied for 2nd place in job growth. Total nonfarm employment in the Houston metro stood at 3,202,100 in October 2019, up 80,400 or 2.6%, from one year earlier, the U.S. Bureau of Labor Statistics reported. During the same period, the national job count increased 1.4%. October 2019 marked the 24th consecutive month that Houston’s annual rate of job growth has exceeded the national rate. Among the 12 largest metropolitan areas in the country, Houston tied for the second-highest annual rate of job growth. Professional and business services added the largest number of jobs year-over-year, up 31,000, rising 6.2%.

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

Houston Commercial Real Estate Office Market Data and Economic Information - Leasing Graph

Houston Commercial Real Estate Office 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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