Read the Beforeitsnews.com story here. Advertise at Before It's News here.

By Coy Davidson (Reporter)
Contributor profile | More stories

Story Views
Now:
Last hour:
Last 24 hours:
Total:

Houston Office Market Report | Q4 2024

Wednesday, January 22, 2025 22:01

% of readers think this story is Fact. Add your two cents.

Looking back at 2024, the flight-to-quality trend led the way

Key Takeaways for the Houston Office Market

Downsizing continues
Net absorption losses mount
Construction limited
Flight to quality persists

Houston Office Market Highlights

Houston’s office market faced challenges in 2024, posting negative absorption each quarter for a year-end annual loss of 1.2M SF. Vacancy rates ticked up to 27.0% in Q4 from 26.7% in Q3 and 26.2% a year ago.

Reflecting a broader trend of firms downsizing is the largest Q4 office absorption: Technip Energies moved into 171,600 SF in West Memorial Place II, reducing the firm’s footprint by 42.4%. Quarterly leasing activity rose slightly to 2.5M SF, but this marks a 16.8% year-over-year decline.

Annual leasing totaled 11.9M SF, the lowest since 2009, with the Katy Freeway West/Energy Corridor leading all activity with 1.5M SF. Notable leases in 2024 included Subsea7’s 177,100-SF in Westgate I in Katy Freeway West/Energy Corridor in Q4 and Ovintiv’s 168,805-SF renewal at Four Waterway in The Woodlands in Q2; Vitol’s new 146,003-SF lease at 3120 Buffalo Speedway in Greenway Plaza will take up all space in the new building underway.

The construction pipeline remains tight, with just three buildings totaling 597,413 SF under construction at 80% preleased. No new projects were delivered or started in Q4, and only Norton Rose Fulbright’s CBD headquarters was completed earlier in the year. Class A rental rates fell to $35.25 PSF from $36.24 year-over-year, while overall gross rents declined to $30.41 PSF from $31.25 last year.

Executive Summary

Houston 2024 Office Market Retrospective

FIRST QUARTER

Declining fundamentals alongside a continued flight-toquality trend.

Slight improvements in vacancy rates, driven by positive absorption in select Class A properties.

SECOND QUARTER

A growing preference for quality office spaces with modern amenities, spurred by hybrid work trends.
Intense competition for Class A properties, despite rising interest rates.

THIRD QUARTER

Rising construction costs and tighter financial conditions, creating headwinds for landlords.
Increased emphasis on tenant-landlord collaboration to address tenant improvement (TI) allowances and buildout expenses.

FOURTH QUARTER

Negative absorption totaled 1.2 million square feet for the year, driving vacancy rates to 27.0%.
Leasing volume, while slightly improved from the prior quarter, remained at its lowest year-to-date level since 2009.
Prime submarkets – Katy Freeway West/Energy Corridor, West Loop, CBD and The Woodlands – each reported over 1.2 million square feet of leasing activity during the year, reflecting tenant interest in top locations.
The flight-to-quality trend persisted, with buildings constructed since 2015 achieving an 11.2% vacancy rate and 957,240 square feet of annual positive absorption.
Quoted rental rates continued to decline under market pressure.
Operating expenses surged, led by increased insurance costs.
New construction slowed significantly, with just three projects underway and 80% preleased.

INSIGHTS & OUTLOOK

Certain industries saw growth during the fourth quarter, particularly among smaller companies that previously adopted a cautious approach to their space requirements. These businesses are now actively seeking expansion opportunities to accommodate their evolving needs. In contrast, larger companies continued the trend of shifting toward smaller, more efficient spaces, focusing on rightsizing to optimize costs and adapt to hybrid work models. The sustained demand for high-quality office spaces underscores the market’s resilience, even amid economic uncertainties. To navigate these evolving dynamics, strategic collaboration between landlords and tenants, coupled with flexible leasing strategies, will be essential.

Houston office top office buildings and subleases

Click here to download the full report as a PDF

The post Houston Office Market Report | Q4 2024 appeared first on Coy Davidson – The Tenant Advisor.

Source: https://coydavidson.com/houston-office-market-report-q4-2024/

Before It’s News® is a community of individuals who report on what’s going on around them, from all around the world.

Anyone can join.
Anyone can contribute.
Anyone can become informed about their world.

"United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.

Before It’s News® is a community of individuals who report on what’s going on around them, from all around the world. Anyone can join. Anyone can contribute. Anyone can become informed about their world. "United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.

LION'S MANE PRODUCT

Try Our Lion’s Mane WHOLE MIND Nootropic Blend 60 Capsules

Mushrooms are having a moment. One fabulous fungus in particular, lion’s mane, may help improve memory, depression and anxiety symptoms. They are also an excellent source of nutrients that show promise as a therapy for dementia, and other neurodegenerative diseases. If you’re living with anxiety or depression, you may be curious about all the therapy options out there — including the natural ones.Our Lion’s Mane WHOLE MIND Nootropic Blend has been formulated to utilize the potency of Lion’s mane but also include the benefits of four other Highly Beneficial Mushrooms. Synergistically, they work together to Build your health through improving cognitive function and immunity regardless of your age. Our Nootropic not only improves your Cognitive Function and Activates your Immune System, but it benefits growth of Essential Gut Flora, further enhancing your Vitality.

Our Formula includes: Lion’s Mane Mushrooms which Increase Brain Power through nerve growth, lessen anxiety, reduce depression, and improve concentration. Its an excellent adaptogen, promotes sleep and improves immunity. Shiitake Mushrooms which Fight cancer cells and infectious disease, boost the immune system, promotes brain function, and serves as a source of B vitamins. Maitake Mushrooms which regulate blood sugar levels of diabetics, reduce hypertension and boosts the immune system. Reishi Mushrooms which Fight inflammation, liver disease, fatigue, tumor growth and cancer. They Improve skin disorders and soothes digestive problems, stomach ulcers and leaky gut syndrome. Chaga Mushrooms which have anti-aging effects, boost immune function, improve stamina and athletic performance, even act as a natural aphrodisiac, fighting diabetes and improving liver function. Try Our Lion’s Mane WHOLE MIND Nootropic Blend 60 Capsules Today. Be 100% Satisfied or Receive a Full Money Back Guarantee. Order Yours Today by Following This Link.

Comments

Online:
Visits:	1,671,706,101
Stories:	8,336,852