Houston Office Market Melts Down
by Wolf Richter
WolfStreet.com
May 2, 2016
Leasing activity plunges, availability & sublease space balloon
Office leasing activity in Houston in the first quarter plunged 25% from the already beaten-down levels a year ago, to 1.56 million square feet (msf), worse even than during the Financial Crisis, according to commercial real estate services firm Savills Studley.
That’s down 59% from the 3.8 msf of signed deals in the fourth quarter 2014, back when the oil bust was still considered a blip and hadn’t yet impacted the office market.
The availability rate rose by 4 percentage points from a year ago to 24.5%, or 47.4 msf for Greater Houston. A horrendous office glut! The availability for Class A buildings jumped by 5.3 percentage points to 26.5%, the “highest mark in more than a decade as sublease space continues to hit the market.”
There were large variations: In Houston downtown, where “only” half of the office space is occupied by energy and engineering firms, the availability of Class A buildings soared 5.7 percentage points during the quarter to 21.5%; but in the Katy Freeway sub-market, where about 90% of the office space is occupied by energy firms, availability hit 33.6%. In the Greenspoint sub-market, it hit a stunning 48%!
The Rest…HERE
