HOUSTON – Houston’s supply of sublease office space rose to 9.2 million square feet in the first quarter as shrinkage in the energy industry combined with a robust construction pace has damaged the office market, Colliers International reports.
Houston’s sublease supply stood at 3.8 million SF at the end of 2014 before energy companies began shedding their excess office space.
Like a dark cloud over the office market, 6.3 million SF is still under construction, Colliers reports.
The citywide office vacancy rate hit 15.3 percent in the first quarter, up from 13.1 percent a year ago.
“Houston is home to most major energy companies and its economy and real estate market can be positively or negatively affected by the price of oil,” says Lisa Bridges, Colliers Director of Research in Houston “Houston’s first quarter office market in 2016 continues to struggle due to the low price of oil, but it appears to be faring better than expected in a $40 per barrel economy.”
Office retail rates remain flat, for the most part, Colliers reported. The average rent for all classes of space was $27.98 per SF in the first quarter of 2016, up from $27.75 per SF in the first quarter of 2015.
April 19, 2016