Wednesday , 25 April 2018
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Houston’s Oversupply of Sublease Space is Growing Again

HOUSTON – (Realty News Report) – Houston’s supply of sublease office space has been increasing again, wiping out some of the celebrated decreases in the overhang.

Houston has 9.4 million SF of sublease space available, according to a recently released March report by NAI Partners. The sublease supply was less than 9 million SF at year-end – a short-lived positive milestone.

The increase was due in part to Sonoco Logistics placing 86,000 SF of sublease space—the total of its lease—on the market at Lake Pointe Plaza in Sugar Land, NAI reported. Also, Halcon Resources added 52,000 SF of sublease space to the supply by offering space at 1000 Louisiana St. – Wells Fargo Plaza in downtown.

Still, the conditions are better than a couple of years ago when the sublease office space in Houston was over 12 million SF. Energy companies vacated great quantities of space – or never even occupied new buildings that they once thought they needed – when oil prices took a nosedive. At that time, Houston had more sublease office space than any city in America.

Rents for sublease space have been falling. In fact, the rent for sublease space in newer office buildings fell to a record low, NAI reported. “The average asking gross rental rate for sublease space in Class A buildings built in 2014 or newer is at $17.77 per SF, down $20.50, or 53.6 percent, since the oil downturn became apparent in the office market in Q3 2014,” NAI reported.

April 2, 2018 Realty News Report Copyright 2018

 

 

 

 

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