HOUSTON-Three commercial real estate companies have weighed in on Houston office market trends for Q2 2013. And all three have come to the same conclusion: The demand for space is still high, especially in certain submarkets. This, in turn, is leading to more office space construction.
Vacancy rates range from just above 10% (from Delta Associates, Transwestern's research affiliate) to 14.1% (from Jones Lang LaSalle, which calculates information only from class A and B office buildings.
Given the amount of product in the pipeline, Delta Associates predicts that vacancy rates will remain in the 10% range during the next 18-24 months. Meanwhile, Jones Lang LaSalle predicts that in-demand submarkets – the Energy Corridor, The Woodlands and, to an extent, the Galleria – will continue to see a lack of space, thereby remaining landlord-favorable markets.
The JLL report also notes, however, that tenants willing to look outside these markets (such as in the Greenspoint/North Belt and southwest submarkets) will find more vacancies, more landlord concessions and lower rents. But overall, the Houston MSA will continue to tilt in favor of landlords for the foreseeable future.
| Company | Total Vacancy | Total Inventory | Absorption | Under Construction |
| Avison Young | 11.1% | 219 million | 1.1 million | 10 million |
| Delta Associates | 10.4% | 242 million | 538,000 | 9.7 million |
| JLL (Class A&B Only) | 14.1% | 150 million | 921,708 | 5.5 million |
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