With more than 50% of local office workers returning to the workplace according to Kastle Systems, there are signs the Houston economy is ramping back up following months of sluggishness spurred on by the pandemic. But, the office market has yet to see demand fully return. Total vacancy is again on the rise topping in at 22.5%, the highest rate in the country among major metros. Leasing activity has seen a slight jump over the first half of 2022 with 5.6 MSF leased, up from the 4.7 MSF recorded over the same span in 2021. Available sublease space continues to be elevated, tallying an increase of nearly 1.3 MSF since the start of 2021 for a total of 7.1 MSF currently available. At the height of the oil slump in 2016 sublease space accounted for 4.5% of inventory, nearly 50% higher than the current 3.1%. With a full recovery possibly years away, landlords will be pressed to stay aggressive offering competitive rates and generous concession packages in what was already a very occupier friendly market.
