HOUSTON—Office vacancy rates hovered above average between 16% and 21% last year, and construction activity is still high. The deals on the market have been competitive, and there is a significant amount of capital looking for assets in Houston, with the premise that the market is at its bottom and better yields can be realized here relative to other major metros, according to a recent report by Commercial Café.
“Rising interest rates will have a major impact on acquisitions by office REITs in 2018 and create increased focus on development/redevelopment projects,” says Doug Ressler, director of business intelligence, Yardi-Matrix.
However, office employment has not grown significantly, and the study points out that Houston recovery is at least 12 to 18 months away. In addition, the office market continues to struggle, as US crude prices hover around $50 per barrel. According to the US Energy Information Administration, those prices are expected to stay in this range through 2018.
Recommended For You
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Lisa Brown
Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
