HOUSTON – Developers are starting a number of new office projects in Houston as the energy industry generated a jobs expansion that has tightened the office market considerably.
“It’s going to be another good year,” says Sanford Criner of the CBRE real estate firm. “We think over the next two years we’ll see a really robust office market.”
Office vacancy rates are at their lowest point in years. Over the last year, office vacancy has dropped from 12 percent to 6 percent in the prime Class A buildings in the Energy Corridor of west Houston and the market is tight in downtown and in The Woodlands.
New buildings are under development in the Energy Corridor, The Woodlands, Westchase and in the Galleria area, and maybe something will be built in downtown, too. In recent days, announcements of new construction projects included: Granite Properties’ 12-story new building on Briarpark Drive in Westchase; Wile Interests and Stream Realty project on the Katy Freeway at Greenhouse Road and the upcoming headquarters development by Phillips 66.
A large new campus will be built in the Energy Corridor to accommodate Phillips 66, which is breaking off to be solo again from ConocoPhillips. Representatives of Phillips 66 are focused on the Katy Freeway, within a few miles of Beltway 8, scouting for land.
Office space is exceptionally tight in the hot areas, such as the Energy Corridor, and companies are scrambling to find space and lock-in deals for the future as they plans to hire more people, says Ryan Hartsell of Oxford Partners.
“It’s definitely turned around,” Hartsell says. “We’re working on a lot more expansions. Companies are willing to take on longer obligations.”
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