Q3 2022 | Houston Office Market Report

The office market in Houston continues to struggle with slower demand and major vacancy issues. Employees are returning to the office slowly, but steadily and companies are fine-tuning their policies for work-from-home with most pressing employees for more time in the office. The tight labor market makes the effort to “force” employees back into the office problematic for employers concerned about losing employees who have grown fond of working remotely. We saw more activity from the larger users this quarter, but it was still subdued. Economists are starting to agree that a recession is on the way, if not already here, and companies are taking a more defensive posture as a result. We expect office leasing to remain sluggish in the short term.

Patrick Duffy | President

Key Takeaways

  • Houston office market records negative net absorption
  • Vacancy up marginally by 20 basis points
  • Leasing activity rose over quarter
  • Spec suites lease up quickly

Houston Highlights

Houston’s office market posted negative net absorption in Q3 2022, recording -409,185 square feet. The overall average vacancy rate rose marginally by 20 basis points between quarters from 23.1% to 23.3%. Office inventory increased slightly as 97,600 square feet of new inventory was added…