Austin and Houston Pace Improving Texas Office Market
All four of the major Texas office markets demonstrated improving fundamentals in the first quarter of 2012. The fact that Houston and Austin performed the strongest among the four major metropolitan areas should come as no surprise given that these two cities have posted the strongest employment growth in the country over the past year.
Houston proved to be the city with the most leasing activity with almost 1.1 million square feet of net office space absorption driven by expansion in the energy industry. In terms of rental rates Houston and Austin have the healthiest average quoted rents for both CBD and Suburban properties. I should note that in Dallas and San Antonio suburban office space historically dominates their Central Business Districts, while Houston and Austin both have strong downtown and suburban office sectors.
San Antonio and Austin boast the lowest overall vacancy rates for all classes of office space inventory. However, these two markets combined don’t have the total office inventory as the much larger Dallas and Houston markets have individually.
- Quoted rents are expressed as the annual rate per square foot.