HOUSTON—When comparing statistics from the third quarter office sublease market with this quarter, much of it is similar to the previous numbers. However, there is one significant exception, says JLL.
Houston's office sublease inventory in the fourth quarter decreased for the first time since the third quarter of 2014. After growing by a net of 3.5 million square feet in 2016, the sublease inventory decreased by 5% following an increase in leasing activity and ConocoPhillips' decision to relocate its headquarters to Energy Center IV, which was formerly available for sublease.
Although sublease activity is improving, significant progress is still needed, says JLL. One bright spot is that four multi-floor subleases were signed in the fourth quarter. It is interesting to note that only three were signed in the previous three quarters.
It is no surprise that energy and related companies account for all of the top 20 largest subleases. The largest blocks of sublease space activity were located in Katy Freeway, CBD, Galleria and Westchase. More than 4 million square feet of sublease inventory remains for the long term, or five-plus years of remaining terms.
“A modest uptick in leasing activity from law and other professional services firms helped absorb some sublease space this quarter,” Steve Burkett, executive vice president with JLL's office tenant representation group, tells GlobeSt.com. “While it shows progress, we still have a long way to go. Many companies in Houston continue to face significant economic headwinds. It will take a prolonged sense of stability in the price of oil before we really see growth that will absorb more of the available space.”
Other firms may take space off the market if oil stabilizes above $50 per barrel. The OPEC agreement is a good start, energy executive outlooks are improving and rig counts are increasing, says JLL.
HOUSTON—When comparing statistics from the third quarter office sublease market with this quarter, much of it is similar to the previous numbers. However, there is one significant exception, says JLL.
Houston's office sublease inventory in the fourth quarter decreased for the first time since the third quarter of 2014. After growing by a net of 3.5 million square feet in 2016, the sublease inventory decreased by 5% following an increase in leasing activity and
Although sublease activity is improving, significant progress is still needed, says JLL. One bright spot is that four multi-floor subleases were signed in the fourth quarter. It is interesting to note that only three were signed in the previous three quarters.
It is no surprise that energy and related companies account for all of the top 20 largest subleases. The largest blocks of sublease space activity were located in Katy Freeway, CBD, Galleria and Westchase. More than 4 million square feet of sublease inventory remains for the long term, or five-plus years of remaining terms.
“A modest uptick in leasing activity from law and other professional services firms helped absorb some sublease space this quarter,” Steve Burkett, executive vice president with JLL's office tenant representation group, tells GlobeSt.com. “While it shows progress, we still have a long way to go. Many companies in Houston continue to face significant economic headwinds. It will take a prolonged sense of stability in the price of oil before we really see growth that will absorb more of the available space.”
Other firms may take space off the market if oil stabilizes above $50 per barrel. The OPEC agreement is a good start, energy executive outlooks are improving and rig counts are increasing, says JLL.
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