Good Time for Non-Energy Tenants to Lease

When pent-up demand will occur is still unknown.

HOUSTON—Tenant activity among the energy sector is limited for the time being because many energy tenants either already renewed or expanded leases in 2014 and early 2015. Or perhaps they are on the sidelines if leases expire in 2017 to 2018. Some of these energy tenants are taking the “wait and see” approach until they see clarity in the business outlook.

These factors would make it a good time for non-energy tenants to be in the market. Colvill Office Properties reports good activity among law, accounting and consulting firms as well as smaller tenants, and anticipates the Houston market will experience a pent-up demand market for larger energy tenants once oil prices stabilize. The question of when will that time come is still to be answered.