HOUSTON-Though economic indicators seemed to be firing on all cylinders in the Houston market during Q1 2013, the increase in employment didn't seem to spill over into office space figures. According to figures released by Delta Associates, the research affiliate of Transwestern, net absorption of office space totaled just 8,000 square feet, versus the 1.4 million square feet absorbed during Q4 2012.
The main reason for the huge drop can be found in the Class B market, which posted a negative 456,000 square feet of net absorption as tenants continued moving to Class A space.
Vacancy also inched upward slightly, hitting 10.8% out of an inventory of 252.1 million square feet during Q1 of 2013 versus the 10.7% reported in the last quarter of 2012. The vacancy was well below the 11.5% reported during Q1, 2012.
The report notes that strong growth should be the norm during 2013 (assuming the macro/global situation doesn't become problematic). If this is the case, vacancies could likely drop into the 9% range within the next two years.
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