Q1 2022 Houston Office Occupiers Guide
With more than 50% of local office workers returning to the workplace according to Kastle Systems, there are signs the Houston economy is ramping back up following months of sluggishness spurred on by the pandemic. But, the office market has yet to see demand fully return. Total vacancy is again on the rise topping in at 22.3%, the highest rate in the country among major metros. Leasing activity has flattened with only 11.4 MSF inked in 2021, down from 13.0 MSF in 2020 and 43% lower than the 17.0 MSF posted in 2019. Available sublease space continues to be elevated, tallying an increase of nearly 1.9 MSF since Q3 2020 for a total of 7.9 MSF currently available. At the height of the oil slump in 2016 sublease space accounted for 4.5% of inventory, 50% higher than the current 2.9%. With a full recovery months or possibly years away, landlords will be pressed to stay aggressive offering competitive rates and generous concession packages in what was already a very occupier friendly market.