Houston Office Market
The office market in Houston is looking like it will have a very depressing year with spiraling job losses and empty office buildings. In fact there could be as much as one million square feet of negative absorption. It is argued that the office market in Houston has not had a year as bad as this since the collapse on Enron. In quarter one of 2009 there was 367,000 square feet of negative absorption. There is also over one million square feet of sublease space on the market, which is bringing down the average rental; value. It has increased 12.4% from Q4 2008 and is now at the highest rate since 2005.
Whilst this is grim reading for landlords and agents, for tenants and occupiers this is good news as lower rents are available as well as a number of generous incentives such as free rental periods. Experts say that overall the vacancy rate will rise to 14 percent citywide by the end of 2009. This is because there is an additional five million square feet of office space due to come on the market. Rental values may also drop if energy prices keep falling and the recession is prolonged into 2010.
At present the average rental price is $23.63 per square foot rising to $31.94 for class A space.