HOUSTON – (Realty News Report) – Houston’s office vacancy is getting worse, increasing pressure on landlords to cut rental rates, according to CBRE.
The third quarter vacancy rate rose to 18.5 percent, up from 17.6 percent in the third quarter of last year, the CBRE MarketView report.
The Houston office market has suffered through tough times for the last three years, following a sharp decline in energy prices and industry layoffs. That resulted in increase in vacancy and a bulge in sublease supply of office space. Oil prices have recovered, but the office market has not.
The initial leases on sublease space are expiring, adding vacancy to the landlord side of the ledger. This is putting pressure on landlords to cut rents to fill the buildings.
CBRE reported the average rent asking price was $29.06 per square foot in the third quarter, down from $29.33 in the third quarter of 2017.
Houston’s sublease inventory was 9.7 million SF in the third quarter, down from 10.5 million SF in the comparable period of 2017.
Oct. 9 2018 Realty News Report Copyright 2018