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One month into 2020, overall vacancy is at 21.6% and availability is at 26.2%, both up from this time last year. The Houston office market has recorded 1.6 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 352,000 sq. ft., down from 762,000 sq. ft. year-over-year.


Market Highlights

Vacancy remains around 21%. One month into 2020, overall vacancy is at 21.6% and availability is at 26.2%, both up from this time last year. The Houston office market has recorded 1.6 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 352,000 sq. ft., down from 762,000 sq. ft. year-over-year. There have been no projects delivered in 2020 and developments under construction are at 3.4 million sq. ft., outpacing 2018 year-to-date at 2.3 million sq. ft. The Houston average asking full-service rent is at $29.29 per sq. ft., up $0.16 from this time last year.

Pipeline company renews and expands lease. Of the 1.6 million sq. ft. of leasing activity so far this year, the Central Business District ranked as the busiest submarket, led by Enterprise Products Partners’ renewed and expanded lease at 1100 Louisiana. The 513,000-sq.-ft. lease and 22,000-sq.- ft. expansion includes floors 4 through 25. Enterprise signed the lease in January 2020 and plans to renovate the space. Other large tenants in 1100 Louisiana include Enbridge Energy Partners, King & Spalding, and Rider Scott Co.

Houston area’s growing population. In the last 10 years, the greater Houston area’s population has grown by 1.1 million people, now surpassing 7 million, according to the Greater Houston Partnership. Workers have gathered here in search of job opportunities, an affordable cost of living, and quality of life. Metro Houston created 88,000 jobs, a 2.8% increase, in the 12 months ending December 2019, according to the Texas Workforce Commission, a number that may change when benchmark revisions are released later in the year. Houston’s unadjusted unemployment rate was 3.6% in December, unchanged from 3.6% in November and down from 3.9% in December of last year.


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

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