Business

Subleases Keeping Houston’s Office Market Afloat

Overall office vacancy went up again last year but there is hope 2018 will be better

About 23 percent of Houston’s class A and B office space sits empty.

Since the beginning of the oil downturn, Greater Houston has had difficulty filling its offices.

Vacancy among class A and B office buildings rose from 13.5 percent in 2014 to 23.2 percent in the last quarter of 2017, according to commercial real estate services firm JLL.

But it could be worse if not for subleasing.

“For the year, about 2.8 million square feet of space was leased from the sublease inventory,” Bruce Rutherford, international director and head of the global energy practice at JLL, said. “And that represents about 25 percent of all of the space that was leased.”

That’s up significantly from the previous year and Rutherford said while it helps Houston’s office market, it wasn’t enough to balance it.

So what about this year?

“2018 is going to be a better year,” Rutherford said. “But it’s not likely to be a great year for landlords.”

Office tenants, on the other hand, can benefit from low rents and concessions. Rutherford calls it a once-in-a-generation opportunity for many companies.

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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...

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