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Greater Houston Region Continues Measured Office Market Recovery

HOUSTON-Third-quarter activity is slow but steady as the metro marks its sixth consecutive quarter of positive gains. The strong spots were the northern and western suburbs while the CBD and Galleria continue to hamper overall results.

By Amy Wolff Sorter | Updated on October 06, 2005

HOUSTON-The region’s third quarter office activity shows a slow, but continued recovery, according to the latest market report by Grubb & Ellis Co. The latest count shows 450,478 sf was absorbed in the third quarter, marking the sixth consecutive gain for the city and taking the year-to-date total to 1.5 million sf.

Aiding the recovery was a 1.1 million sf drop in available sublease space and a construction holdback that kept deliveries at 114,429 sf for the quarter. It doesn’t mean, however, that the construction is grinding to a halt. To date this year, 969,412 sf has delivered, up from 368,218 sf in Q1. The bulk of the new space is spec projects, mostly in the Katy Freeway and Westchase corridors.

Overall vacancy is sitting at 17.9% in the near 154.8-million-sf inventory. That might still be considered high, but there is reason for optimism, says Ariel Guerrero, client services manager in Texas for Grubb & Ellis. “There’s still a lot of space out there that’s available,” he tells GlobeSt.com, “but in terms of vacancy, that’s the lowest figure we’ve seen in the past 2.5 years.”

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