2Q 2019 Houston Office Market Report
Snag in Real Estate Recovery Ensures Market Remains Occupier Friendly
In the second quarter of 2019, leasing activity continued to lag below historical averages, further indicating the current solid tenant-friendly market. As prices for WTI continue to hover in the mid-$50 range, there is little incentive for energy companies to move or expand unless necessary.
The Occidental-Anadarko merger also raises the question of another possible large block of space about to be added to the market. Net absorption for the quarter was again negative, with -470,773 SF of direct space vacated across the MSA. Houston’s overall job growth remains strong, however, adding 82,900 new jobs in the 12 months ending in June.
The strong jobs growth bodes well for firms outside of the energy industry looking to take advantage of the record vacancy and upgrade their space to compete in the workplace arms race to attract and retain the best talent in their field.