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Overall vacancy is up 100 basis points at 22.3% and availability is up 60 basis points at 26.4%, compared to this time last year.
Vacancy and availability. Overall vacancy is up 100 basis points at 22.3% and availability is up 60 basis points at 26.4%, compared to this time last year. The Houston office market has recorded 7.5 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 1.3 million sq. ft., involving negative 1.9 million sq. ft. of direct space and positive 619,000 sq. ft. of sublease space. A recent significant sublease transaction involved 80,613 sq. ft. at 4460 Highway 225 in the Gulf Freeway/Pasadena submarket by Universal Plant Services taking floors one and two.
Oxy extends lease through 2031. Occidental Petroleum Corp. has signed on to stay at Houston’s Five and Three Greenway Plaza location through 2031, extending its 972,145-sq.-ft. lease. The energy company will maintain its split-campus setup less than one year after its substantial merger with Anadarko Petroleum Corp. Occidental has been scaling back assets and working to reduce its debt since its merger with Anadarko, but the firm’s plan to sell $15 billion in assets by late 2021 has been hindered by the Coronavirus pandemic, which has lowered the value of some of its oil assets.
Houston economic indicators. The Federal Reserve Bank of Dallas reported that the Houston economy declined at a dramatic pace in April as the impact of COVID-19 and efforts to contain it swept through the region. While employment and unemployment showed record-breaking worsening, there have been some early signs of economic recovery. Taken together, the data imply that declines in the economy were slowing in May. A protracted recovery and a great deal of uncertainty remain ahead.
Director of Research
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