HOUSTON--Houston's office market is riding high: 2.2 million square feet of positive net absorption was recorded in the fourth quarter of 2014, bringing the year-end total to 6.8 million square feet.

“Houston's office market recorded record high asking rental rates in Q1 2014,” Lisa Bridges, director of market research at Colliers International, told GlobeSt.com.  “Average quoted rental rates began peeking mid-year and we saw those rates begin to level off in Q4 2014. During 2014, Houston's office market experienced lower than average vacancy rates and a huge surge in new construction and deliveries in 2014.”

With over 2.1 million square feet of new inventory delivered during the fourth quarter, the year-end delivered inventory was over 6.6 million square feet in 2014. ExxonMobil is one of the key motivators. The company began moving into a portion of its new north campus headquarters, and Southwestern Energy moved into its new corporate headquarters just south of the ExxonMobil campus.

Houston's office construction pipeline still contains over 17 million square feet, and 7.5 million square feet of that is speculative development which is 28.8 percent pre-leased. The majority of the space is located in the suburban submarkets and is scheduled to deliver in 2015.

The citywide average rental rate decreased slightly between quarters: 1.6 percent from $27.08 to $26.78 per square foot, but is still 3.2 percent higher than it was a year ago. Both CBD and suburban class A average rental rates decreased over the quarter; however, both class B average rental rates rose.

Houston's office investment sales market is benefiting from foreign capital. According to a recent survey by the Association of Foreign Investors in Real Estate (AFIRE), Houston ranked #3 in the top five U.S. cities for foreign investors.

The Houston metropolitan area created 120,600 jobs between October 2013 and October 2014 -- an annual increase of 4.3 percent over the prior year's job growth. Sectors creating most of the jobs contributing to the annual increase include mining and logging, construction, transportation, warehousing and utilities, and health care and social assistance. Houston's unemployment rate fell to 4.7 percent from 5.9 percent one year ago.