For Most Part, Texas Office Leasing Not Great, But Stable

DALLAS-The 2000 space race isn’t going to be repeated this year, but second quarter numbers are showing that leasing activity has picked up. Rounding the corner into the third quarter, it appears all will remain copasetic, say two Texas brokers.

“I don’t see anything on the horizon that would change it a whole lot,” Randolph Strait, Crescent Real Estate Equities’ vice president of leasing in Houston, tells GlobeSt.com. Houston has been a driving force for Texas this year, thanks to the energy industry. Strait says 500,000 sf in the city’s 77 million sf of class A office inventory had been absorbed in the first quarter and it’s looking like the same could be realized in the final count for the second quarter. That’s not the case in Dallas, where Q1 absorption had been negative for the first time in a decade. Calvin Hull, senior director of Cushman & Wakefield of Texas Inc.’s Dallas office, pegs the Dallas vacancy at 18% or 6-1/2 million sf, of which 5-1/2 million sf is sublease space. At the end of 2000, Dallas sublease space had totaled 2-1/2 million sf.

Houston’s vibrant market, Strait says, is a direct result of the energy industry’s good times. Take away the windfall, he says, and Houston looks much like the rest of the country. “I would expect a reasonably good third quarter,” he predicts. “It’s not going to be a spectacular year, but it will be a good solid year.”