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Office Market Advice: Stay Alive 'Til 2005

HOUSTON-If the rumors prove true, the CBD could get a boost this year, but that's only if street talk pans out. If it doesn't, the outlook is pretty dismal for the office market. There will be jobs, just not in areas that aid the office leasing sector.

By Jennifer Brenner Andrade | Updated on January 30, 2004

HOUSTON-The Houston office market is in a slump with downtown muddled in its worst performance in a decade. This year is forecast to be flat or get worse by all performance indicators so the message from CBRE/Trione & Gordon is “stay alive ’til 2005.”

“Projected employment provides no basis for absorption,” Sanford Criner, executive vice president with CBRE/Trione & Gordon, said at a recent forecast event in downtown Houston. He says the Greater Houston Partnership is predicting job growth in 2004, but at least 8,600 of those jobs are health-care related. Other arenas that will drive new jobs are hotels, restaurants, construction and wholesale trade. Only 1,500 jobs this year are expected to come from professional and business services, he says, adding it’s simply not enough to resurrect an office market with 1.1 million sf of negative absorption, including sublease space.

Without a doubt, the rumored 350,000-sf Citgo move from Oklahoma to downtown Houston would be a major “shot in the arm,” Criner says…should it come to fruition. The other hot rumor is that ChevronTexaco is looking to expand by as much as one million sf. The corporation’s execs are rumored to be eyeing 1500 Louisiana, the former Enron Center South building. Right now, ChevronTexaco occupies 550,000 sf of class A space in the downtown. The whispered move, Criner says, could amount to just “a space swap.”

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