The Houston Office market is still ripe for those looking to rent space. Despite a somewhat sluggish couple of years, there are plenty of properties available in virtually every submarket and at any budget.
All recent research suggests that the health of the Office Market in Houston is poised for a strong 2020 even in the face of high vacancy levels, http://bit.ly/2NCX1xG
If you’re looking to add additional space, start your first office, create a satellite location, etc. your cost per square foot will be higher as well versus previous years. This is directly in relation to the local job market:
“The vacancy rate in the Houston office market was close to unchanged quarter-over-quarter, up 10 basis points from Q2 2019. The amount of vacant office space on the market is approximately 51.1 million sq. ft.—comprised of 47.6 million sq. ft. of direct space and 3.5 million sq. ft. of sublease space. The Central Business District vacancy rate is at 24.9%, up slightly from this time last quarter at 24.7%, while the Energy Corridor vacancy rate is at 32.7%, down 70 basis points from 33.4% in Q2 2019. Net absorption moved into positive territory at 58,000 sq. ft. compared to this point last quarter when the total was negative 700,000 sq. ft. The increase was primarily due to significant move-outs in Q2 2019 that included HP vacating 260,000 sq. ft. at 11403 Compaq Center W. Dr. and BP vacating nearly 195,000 sq. ft. at Three Eldridge Place in the Energy Corridor. Of the almost 2.5 million sq. ft. currently, under construction—57% of which is being constructed downtown, about 35% of that space has been spoken for. The overall Houston average asking full-service rent has steadily grown over the past years to its current rate of $29.32 per sq. ft., while the Central Business District is averaging $41.41 per sq. ft.”
“The Houston metro created 81,900 jobs, a 2.7% increase, in the 12 months ending August 2019 according to the Texas Workforce Commission. The sectors adding the most jobs over the past 12 months were professional, scientific, and technical services (21,100); manufacturing (11,500); and other services (9,700). Houston’s unemployment rate was 3.9% in August, down from 4.4% in August of last year. The Texas rate in August was 3.6%, the U.S. rate 3.8%. The rates are not seasonally adjusted. The U.S. Energy Information Administration (EIA) reported that the closing spot price for a barrel of West Texas Intermediate (WTI) averaged $56.16 per barrel during the second week of September 2019, down 18.6% from $68.96 for the same period in 2018. Monthly WTI prices averaged $54.81 per barrel in August 2019. Looking ahead, the EIA forecasts WTI to average $62 per barrel in the second half of 2019 and $63 in 2020.”
The Downtown Houston market is very hot and is one of the most sought after areas with many industries vying for the new construction as it becomes available. So, as we wind down 2019, reach out to SwiftLease to begin your office search and allow us to help you navigate the process and all at ZERO cost to you!