HOUSTON OFFICE

Monthly Market Snapshot

AUGUST 2019

Market Highlights Market Activity

Vacancy rate at 21.5%. Vacancy in the Year-to-Date
August
Houston office market dropped 60 basis
points year-over-year, reaching its current rate 2019 2018

of 21.5%. The amount of vacant office space Vacancy 21.5% 22.1%

on the market is approximately 50.7 million
Availability 26.2% 26.4%
sq. ft. Net absorption is in the red at negative
438,000 sq. ft.—though still an improvement Net Absorption (SF) (437,849) (2,034,781)
compared to this point in time in 2018, when Leasing Activity (SF) 10,282,488 9,344,029
the year-to-date total was more than negative
2.0 million sq. ft. Of the 1.6 million sq. ft. Deliveries (SF) 1,378,260 374,204

currently under construction, about 66% of Under Construction (SF) 2,575,391 2,650,309
that space is available for lease.
Gross Avg Asking Rent (PSF) $29.44 $28.35
Relocations in the Galleria. 1360 Post Oak,
a 25-story, 496,608-sq.-ft., Class A office
tower has new tenants to add to its roster.
Engie, a French energy utility company,
Supply & Demand
subleased 112,024 sq. ft. from BHP Billiton Supply Demand Vacancy
10.0 25%
in the Galleria/West Loop submarket. Engie
Millions (SF)

will occupy the fourth through ninth floors 7.5 20%

and will move into the building in December.
5.0 15%
In addition, commercial real estate firm NAI
Partners subleased 20,143 sq. ft., occupying 2.5 10%
the entire 19th floor, with plans to move
into the building in mid-September. Other 0.0 5%

tenants in the building include Stewart Title -2.5 0%

subleasing 156,000 sq. ft., and Sheridan 2014 2015 2016 2017 2018 YTD 2019

Production Co. subleasing 59,000 sq. ft.,

with both transactions taking place in 2018.

Job growth accelerates. Preliminary jobs Under Construction

data for Houston continue to be strong in Total Under Construction: 2,440,453 SF
2019, and the labor market remains tight. Available Leased

Employment growth accelerated from 3.3% CBD

FM 1960/Hwy 249
over the three months ending in May to 3.6% Post Oak Park
over the period ending in June. Metro job The Woodlands
Midtown
growth was 2.9% from June 2018 to June
Katy/Grand Pky W
2019 (89,650), with the largest number of North Loop West
jobs created in professional and business Sugar Land/E Fort Bend
NASA/Clear Lake/SE
services. Houston's unemployment rate rose
Kingwood/Humble
from a historic low of 3.4% in May to 3.6% 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4
in June. The unemployment rate in Texas Millions (SF)
dropped to a record low of 3.4%, and U.S.
unemployment was 3.7%.
Leta Wauson
Director of Research
leta.wauson@naipartners.com HOUSTON | AUSTIN | SAN ANTONIO
tel 713 275 9618