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Houston Office market vacancy at 25.4%.
HOUSTON OFFICE VACANCY STILL PUSHING UPWARDS
The vacancy rate increased 180 basis points to 25.4% as of November 30, compared to this time last year at 23.6%. Almost 2.6 million sq. ft. has been delivered to the market in 2021, with half of that space available for lease. At a time when leasing activity hasn’t returned to pre-pandemic levels, overall office net absorption registered at negative 2.4 million sq. ft.
CONSTRUCTION JUST UNDER 2.5 MILLION SQ. FT.
As of year-to-date November 30, 2021, there is 2.4 million sq. ft. under construction, representing non-owner-occupied buildings 20,000 sq. ft. and over. The submarket with the most square footage under construction is the Texas Medical Center, underscoring continued momentum toward life sciences office product. Texas A&M and partner Medistar are under way on construction of the 510,000-sq.-ft. Horizon Tower—a state-of-the-art life sciences building—at 6929 Main Street, which is expected to deliver in Q1 2023.
FUTURE JOB GROWTH EXPECTED FROM SECTORS OTHER THAN ENERGY
Houston shed 361,400 jobs at the start of the pandemic, but the metropolitan area has since recovered about 74.4% of those positions, according to the Greater Houston Partnership’s annual employment forecast. About 8,700 jobs are expected to be added in the professional, scientific, and technical services sector, which includes office-using industries such as accounting, engineering, architecture, and law to name a few. However, it’s not clear how many of the office-using jobs will translate to the need for more office space.
Director of Research
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