HOUSTON – Houston office vacancy rate is high, but office construction is dwindling and the big supply of sublease space is gradually fading, according to CBRE.
“The worst is behind us,” said Cody Armbrister, senior managing director of the Houston office of CBRE, at a press briefing Wednesday. The “early green shoots” of recovery are beginning to emerge, he said.
Houston has a vast amount of available office space as the market recovers from the impact of rapidly declining oil prices. The office vacancy rate is at a 22-year high, CBRE reports and the Class A availability rate is approaching 23 percent.
The Energy Corridor area in west Houston is one of the soft spots in the Houston office market, said CBRE’s Kristen Rabel. Downtown Houston also has a significant amount of available sublease space.
Landlords are making significant concessions and giving generous tenant improvement allowances to make deals happen, Rabel said. “TI and free rent are through the roof,” she said.
Houston had 788,000 SF of negative net absorption in the first quarter, CBRE reports.
April 19, 2017 Realty News Report Copyright 2017