HOUSTON—Houston's economy is strong, thanks in large part to over 17.3 million square feet of office development currently under construction, according to a recent third quarter report released by Colliers International.

“Half of the larger lease transactions that have occurred in 2014 are tenants in the energy industry or professional services serving the energy industry,” Lisa Bridges, Colliers' director of market research, told GlobeSt.com. “Ten million square feet of the 17.3 million…will be occupied by energy industry companies.”

In addition, over 1.2 million square feet of new inventory delivered during Q3, bringing 2014 year-to-date delivered inventory to 4.5 million square feet. Colliers projects another 5.3 million square feet of new inventory will be completed by year-end 2014, which includes ExxonMobil's new north campus. Much of the construction activity is tied to the energy industry and includes office buildings that Shell Oil, ExxonMobil, BHP, Phillips 66 and Noble Energy will occupy once completed.

Houston's office market posted 420,419 square feet of positive net absorption in Q3 2014, pushing year-to-date net absorption to 4.4 millon square feet.

The citywide average rental rate increased 1.6 percent, from $26.52 to $26.94 per square foot over the quarter. The average CBD rental rate increased 3.3 percent, from $36.35 to $37.56 per square foot, while the average suburban rental rate increased 0.1 percent, from $24.95 to $24.98 per square foot over the quarter.