HOUSTON – Houston’s office market posted 400,000 SF of negative net absorption during the third quarter of 2016 and the vacancy rate increased significantly, Colliers International reports.
Houston’s city-wide office vacancy rate rose to 17.1 percent in the third quarter, up from 14.5 percent in the third quarter of 2015, Colliers reports.
“Houston’s office market continues to struggle due to the downturn in the energy industry, leading to negative net absorption and decreased leasing activity,” says Lisa Bridges, director of market research for Colliers in Houston. “Leasing activity has dropped by 28.6% since Q3 2015 and by 13.8% over the quarter. Tenants are renewing existing leases, but more companies continue to contract than expand.”
Large blocks of office space have been placed on the sublease market as energy companies contract. At the same time, a number of new buildings have been completed.
Colliers says only 2.9 million SF of office space remains under construction currently, most notably a 1.1 million SF tower by Hines in downtown Houston.
Nov. 4, 2016 Realty News Report Copyright 2016