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Vacancy moving slowly up. Two-thirds of the way through the first quarter of 2020, overall vacancy is at 21.8% and availability is at 26.4%, both up between 70 to 80 basis points from this time last year.
Vacancy moving slowly up. Two-thirds of the way through the first quarter of 2020, overall vacancy is at 21.8% and availability is at 26.4%, both up between 70 to 80 basis points from this time last year. The Houston office market has recorded 2.0 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 206,000 sq. ft., down from 762,000 sq. ft. year-over-year. 180,000 sq. ft. has been delivered in 2020, comprised entirely of the four-story office building that Alight Solutions will occupy at 8770 New Trails Drive in The Woodlands. The Houston average asking fullservice rent is at $29.36 per sq. ft., up $0.23 from this time last year. The Houston average asking full-service rent is at $29.36 per sq. ft., up $0.23 from this time last year.
New spec office building in Memorial City area. Of the almost 1 million sq. ft. underway in the Katy Freeway East submarket, the 190,000-sq.-ft. building at 9753 Katy Freeway is being built with 85% of the space available for lease. Other office buildings under construction in the submarket include Marathon Oil’s 440,000-sq.-ft. future headquarters in CityCentre, and Village Tower I & II 150,000-sq.-ft. office buildings at 9655 Katy Freeway at the former site of a Toys R Us. The Katy Freeway East market has a vacancy rate of 9.6% compared to the metro’s overall average of 21.8%.
Job growth below average in 2019. Houston jobs grew more slowly from December 2018 to December 2019 at 49,000 jobs—1.6% below the metro’s historical average of 2.1%. Job losses were led by trade transportation and utilities (-1,700) and mining (-1,000), while job gains were led by professional and business services (21,400), education and health services (10,800) and construction (8,600). Employment data for the second half of 2019 may change due to benchmark revisions by the Bureau of Labor Statistics in March 2020.
Director of Research
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