In sharp contrast, Dallas has nearly a 22% vacancy and more than two million sf of negative absorption, Robert Kramp, regional client services manager for the Texas region of Grubb & Ellis Co., tells GlobeSt.com. He says Houston's vacancy always has ranged from 12% to 14% so the numbers should not be alarming.
"Although a few dark clouds are looming over Houston's office market," Kramp says, "energy companies have been able to shed light on the Katy freeway submarket." Research shows vacancy rates dropped dramatically in West Houston, falling more than 250 basis points in the third quarter. The Katy Freeway submarket has 15.4 million sf and an 11% vacancy.
Houston isn't escaping the sublease dilemma confronting most, if not all, of America's major cities. "Perhaps of greatest concerns throughout most high-profile US office markets is the amount of sublease space available, which has soared during the year," says Kramp. "Yet Houston appears to holding it own during the national sublease space glut."
Other findings from the third quarter, put Westchase, the darling of recent quarters at a 21.5% vacancy rate. This is second only to the far southwest submarket, which has a 28.7% vacancy. Westchase still maintains high rents, however, averaging $22.33 per sf for class A space and $17.73 per sf for class B space.
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