Business

Houston’s Office Market Continues To Suffer From Oil Downturn

A new report shows office vacancy in Houston continues to rise, but there is a silver lining.

More tenants are moving out of Houston offices than into them.

Total vacancy for Houston office space rose for the ninth consecutive quarter to 20.9 percent, according to a report by commercial real estate services firm JLL.

The absorption rate remained negative for the fifth quarter in a row – meaning more tenants moving out of than into Houston offices.

At the same time, more unused oil and gas offices are being subleased.

Bruce Rutherford, an international director at JLL in Houston, said that’s thanks to industries that are not energy-related and are doing well, such as technology, healthcare or education.

“Tenants from all of these industries are seeing an opportunity to get extraordinarily high quality space at extraordinarily low prices from the current sublease market,” he said.

Rutherford expects the office vacancy rate to continue to rise through early next year.

“And then we’re going to see that vacancy rate begin to fall as sublease spaces continue to be taken off the market by tenants in all industries taking up that space, energy companies taking it back and saying, no, I need it for my operations,” he said.

Rutherford anticipates the glut of office space will go away by late 2018.

 

Share

Florian Martin

Florian Martin

Business Reporter

Florian Martin is currently the News 88.7 business reporter.Florian’s stories can frequently be heard on other public radio stations throughout Texas and on NPR nationwide. Some of them have earned him awards from Texas AP Broadcasters and the Houston Press Club.Florian is a native of Germany. His studies in Leipzig...

More Information