New Construction and Rehabs Outperform in the Houston CBD

Beau Bellow says office vacancy is down and net absorption is up for the third consecutive quarter.

HOUSTON—Building off the momentum established in the third and fourth quarters of last year, the office market kicked off the year on a positive note, according to a JLL first quarter office report. Notably, both the supply and demand sides of the market showed signs of improvement during the quarter.

Since peaking at 24.5% in the second quarter of 2018, total vacancy has fallen in each of the past three quarters. For the third time in the last four quarters, no new deliveries were completed, which helped push vacancy down by 30 basis points to 23.1%. On the demand side, net absorption remained positive for the third consecutive quarter, totaling slightly more than 600,000 square feet.