Houston’s office market offers a strong opportunity for occupiers, with elevated vacancy and leasing incentives creating favorable market conditions across most submarkets. While overall direct vacancy has begun to plateau at around 22%, leasing volume remains muted well below pre-pandemic levels having posted a nearly 23% reduction year-over-year.
Much of the current leasing activity has been funneled to newer, amenity-rich developments, particularly along the Katy Freeway Corridor as companies aim to be nearer to labor pools amidst increased competition for talent. Direct availability for high-end, Class A space in buildings delivered since 2010 sits below 11%, far outpacing the metro average as slower demand has hit landlords owning aging assets particularly hard.
A quieted development pipeline did get a slight jolt as construction kicked off on 146,000 SF at the upcoming RO mixed-use project in Greenway Plaza. With limited other new construction anticipated, demand for premium office space should continue to tighten as occupiers take advantage of a market that emphasizes choice, quality and advantageous leasing conditions.
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