Houston’s Big Office Tenants Still Have Options
The 16.0% citywide office vacancy rate for Houston at the end of 2010 will not move significantly lower based on a preliminary review of leasing activity for the first three months of the year. I will be releasing my Houston Office Market Review for the 1st quarter of 2011 soon and expect to see positive net office absorption reported, with the suburban market again contributing to the bulk of the positive net absorption figure.
I have posted in the past that the market dynamics for larger Houston office space users will turn first, but first quarter 2011 leasing activity only put a small dent into the available inventory of large contiguous blocks of “Class A” space. The number of “Class A” buildings reporting contiguous blocks of space available larger than 50,000 square feet stands at 60, down from 73 at the end of 2010. While this is a fluid situation with active tenants in the market and new space actually being delivered to the Houston office inventory, if current absorption trends continue for the next couple of quarters it will likely be 2012 before we see any significant shift in office market fundamentals for larger space users, with the exception of the tenants with the largest space requirements over 150,000 square feet and users with location needs outside the “core” submarkets, where Class B product will come into play.
Houston Office Space Availability – (Class A)
Large Available Contiguous Blocks by Size
Large Available Contiguous Blocks: < 50,000 SF by Submarket
Large Available Contiguous Blocks: < 50,000 SF by Building
Contact me to discuss your office space objectives and stay tuned for the upcoming Houston Office Market Review.