Office Availability Decreases in Houston CBD Amid Increasing Options

There are 18 buildings with vacant blocks of contiguous space larger than 100,000 square feet in the CBD.

HOUSTON—The US energy market outlook is optimistic as the country is projected to become a net-exporter in 2020, resulting from an uptick in production paired with technological efficiencies stabilizing consumption. Indeed, oil shows signs of recovery as the maximum closing price for a barrel of West Texas Intermediate reached $59.09 during March 2019, a year-over-year decrease of 11.4%. In addition, strength in the economy bodes well for office demand as the Greater Houston area enjoyed 73,300 new jobs in 2018, representing an annual growth rate of 2.4%.

As a result, the flight to quality persists and class-A office leasing activity in Houston outpaces other markets. To be sure, occupiers are continuing to demand high-quality office space as evidenced by a total of 2.1 million square feet of class-A leasing activity in first quarter, accounting for 69.6% of all leasing for the quarter. Still, flight to quality will put some downward pressure on class-A availability, even more so as development activity tapers.