Office vacancy is inching down as absorption treks upward.<@SM>Industrial absorption and consumer spending going hand-in-hand.

HOUSTON-A recent report released by Delta Associates, the research affiliate of Transwestern, offered the following highlights from 2012.

  • On the economic front, as of October 2012 (the most recent figures available) Houston experienced a 12-month payroll growth 95,800 jobs and an unemployment rate of 6.2% as of October 2012.

On the office side:

  • Class A properties led a strong quarter for net absorption, with 752,000 square feet absorbed. Class B properties absorbed 643,000 net square feet. For all of 2012, the Houston metro totaled 4.2 million square feet of net office absorption, more than the 3.8 million square feet absorbed in 2011. The professional/business services sector and energy sector drove leasing activity.
  • Vacancy continued to decline, falling to 10.6% at year end 2012.
  • Asking rents increased by approximately 4.8% in 2012.
  • The pipeline of properties under construction or renovation increased to 4.6 million square feet at year-end 2012, compared to 1.4 million square feet year over year.

On the industrial side:

  • Net absorption totaled 1.7 million square feet in Q4 and 5 million square feet for the entire year.
  • The overall metro area industrial vacancy rate fell to 4.4% at year-end 2012 from 4.7% a year earlier.
  • There is 3 million square feet of industrial space under construction in the area, up slightly from one year ago.