LOS ANGELES—The collapse of the energy industry has been in the national spotlight and a frequent topic in economic discussions—but no market has felt the impact of the hardships more than Texas, the home of the oil market. At Lee & Associates’ Broker Summit in Las Vegas, we sat down with Chris Lewis and Trey Fricke for an exclusive video interview to find out how the collapse of the energy market has affected the office and industrial markets in Houston and Dallas. It turns out the collapse hasn’t been all bad news, especially in Dallas, which relies less on the energy sector.

In Houston, 30% of the office market comes from the energy business, so the impact is the most significant there, according to Lewis, who focuses on the office market.  He says that the upstream business is seeing the biggest impact, while the downstream business is thriving. The upstream space, however, has seen a boost in sublease space, which is helping to drive deal flow and activity. While there is a lot of vacancy, rental rates have remained stable, although concessions have increased. Lewis has yet to see new industries enter the market, but says that other industries, like tech, are still active.

Dallas has seen minimal impact from the energy collapse, and Fricke, who focuses on the industrial sector in Dallas, says the market is good but not great. Both small and large box spaces are in demand, and rental rates are rising as vacancy rates fall. He describes and equalized market with good availability and rent growth that is beneficial to both landlords and tenants. For the market to be great, according to Fricke, there needs to be a reduced sense of urgency.

Press play to hear more about the Texas market and the brokers’ forecast of the energy markets.