HOUSTON—Technology, demand and right-sizing are revolutionizing traditional office from every angle. NAIOP's O.CON: The Office Conference, held June 24-25 in Houston, leads the conversation on what's driving the future of office (NAIOP is a GlobeSt.com Thought Leader). The inaugural O.CON will showcase creative spaces and retrofits that meet today's demand, and talk about what to do with dinosaur inventory, hear from end-users on space requirements and talk with developers and investors who are doing the deals.

GlobeSt.com caught up with Houston-based Michael Scheurich, president and CEO of Arch-Con Corporation, who is moderating the panel, “The Best Office Markets in America,” to get his take on the hottest office trends and where the panel will lead.

GlobeSt.com: What current new developments are underway?

Michael Scheurich: In Houston we have 17 million square feet of office underway. We're leading the nation. There is a keynote development of one million square feet downtown that, along with a handful of other projects, will come online at the end of 2016.

GlobeSt.com: How are current occupancy rates and rent growth?

Scheurich: Rents are stable. We've seen a lot of rent growth in the past three years. Occupancy numbers are strong. The question will be how occupancy look when all the new projects are delivered.

GlobeSt.com: Why does new development make sense right now?

Scheurich: There is a large demand in the energy sector that is a huge driver in Houston. In the short term it's been healthy; in the long term, it's yet to be determined.

GlobeSt.com: Where are construction costs at right now?

Scheurich: There has been a continual rise in construction costs since 2000. Expectations are to see some relief as a backlog of projects are completed and the number of new projects are expected to decline. As supply softens, prices should get more competitive.

GlobeSt.com: What about tightening labor forces?

Scheurich: This has been a challenge and has reached a peak, though we have seen some improvement. Resources are easing up and prices are now stabilizing. This time last year there was a significant labor shortage in Houston.

GlobeSt.com: What are some of the topics your panel will discuss?

Scheurich: We will discuss where each market stands from an occupancy and rent growth standpoint, hallmark projects for each city, drivers for each market from an economic perspective and changes in trends of buildings and how they are being delivered. It will be a lively discussion.


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