Houston CRE Market Reports | Q2 2017

by CoyDavidson on August 10, 2017

The State of the Houston CRE Market

Metro Houston added 22,900 jobs in the first half of ’17, an improvement over the comparable periods in ’15 and’16, when Houston posted significant losses. The retail and industrial sectors are stable, while the office market continues to struggle from the hangover resulting from the energy downturn. Historically the office market tends to lag and uptick in office using employment growth by 3-4 months.

Here are the Colliers International | Houston second quarter 2017 Market Reports for the office, industrial and retail sector.

Office

Houston Office Market Report

Houston office vacancy increases again over the quarter
Houston’s office market continues to struggle as global oil futures trade below $50 a barrel. With no indication that prices will rise in the immediate future, it will take a while to absorb all of the space the energy industry has placed on the market over the last few years. The good news is most of the larger office projects that were started before the oil slump have delivered, and the projects that were in the construction pipeline… read the full report.

Industrial

Houston’s industrial market sees continued growth on the east side due to boom in petrochemical industry
During the first half of 2017, 3.0M SF of Houston’s industrial inventory was absorbed, all occurring during the first quarter. Second quarter absorption was close to zero, posting only -13,100 SF. The average vacancy rate increased 20 basis points over the quarter from 5.3% in to 5.5%. A little over 1.5M SF of new product delivered during the second quarter, bringing the mid-year new inventory total to over 5M SF. There is currently 4.2M SF under construction and 77.2% is pre-leased…. read the full report

Retail

Houston Shopping Center

Houston’s retail market continues to expand following increased population, jobs and housing growth in suburbs
Houston’s retail market has remained healthy through mid-year 2017, with low vacancy, steady leasing activity and positive absorption. Despite 1.5M SF of new construction deliveries in Q2 2017, the average vacancy rate remained unchanged from last quarter, at 5.6%. Almost half of the 2.3M SF of retail space under construction is preleased and 83% of new construction delivered in 2017 is occupied… read the full report

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