Q3 2026 Houston Office Market Report
Houston’s office market saw signs of life in the third quarter, but the structural challenges facing the office market continue to temper recovery. Though vacancy held at 23.6%, some key standouts at the submarket level demonstrated strength throughout the quarter. The Woodlands, Galleria, and Katy Freeway East submarkets all saw vacancy decline with the consistent leasing demand seen over the last year.
Oil prices above $100 have kept energy companies quite active, and their growth is generating requirements in legal and financial services alongside it. M&A has added a separate layer of demand, particularly for professional services and private equity firms working through deal-driven changes to their footprint.
Trophy buildings with strong locations are commanding never-before-seen rents, and tenant concession packages are shrinking with them. Much of the quarter’s volume came from tenants looking for a full floor or less, and firms are entering the market well ahead of their lease expirations, pushed in part by the threat of the best spaces being leased out from under them.
Phase Two of Park Place at 4100 Westheimer broke ground speculatively in Q3, bringing Houston’s total under construction inventory to 1,117,000 square feet. Construction costs and financing conditions remain the primary check on new starts, though the performance of recently delivered projects like CityCentre Six and 990 Town & Country Blvd have drawn attention from developers who have been on the sidelines.
Oil prices above $100 have kept energy companies quite active, and their growth is generating requirements in legal and financial services alongside it. M&A has added a separate layer of demand, particularly for professional services and private equity firms working through deal-driven changes to their footprint.
Trophy buildings with strong locations are commanding never-before-seen rents, and tenant concession packages are shrinking with them. Much of the quarter’s volume came from tenants looking for a full floor or less, and firms are entering the market well ahead of their lease expirations, pushed in part by the threat of the best spaces being leased out from under them.
Phase Two of Park Place at 4100 Westheimer broke ground speculatively in Q3, bringing Houston’s total under construction inventory to 1,117,000 square feet. Construction costs and financing conditions remain the primary check on new starts, though the performance of recently delivered projects like CityCentre Six and 990 Town & Country Blvd have drawn attention from developers who have been on the sidelines.