Q2 2026 Houston Office Market Report

Houston’s office market tightened in the second quarter, with total vacancy falling to 23.7 percent from 23.9 percent in the first quarter after posting 585,980 square feet of positive net absorption, pushing year-to-date absorption back into positive territory at 446,044 square feet after a soft first quarter.

 

The story beneath the headline remains bifurcation. Notably, Class A buildings absorbed nearly a million square feet in the quarter, while Class B space gave back 413,020 square feet. The pattern continues in which tenants with active requirements are consolidating into newer, better-amenitized buildings, while Class B properties hemorrhage tenants. Katy Freeway East illustrates the trend most sharply: vacancy there dropped by more than four points to 13.1 percent, driven by large move-ins at 990 Town & Country and City Centre Six.

 

Downtown also had an active quarter. Mitsubishi Corporation signed the market’s largest lease of the quarter: 91,761 square feet at 1100 Louisiana, while 811 Main added two large deals in the same building: Two Sigma converted from subtenant to a 27,485-square-foot direct lease, and Latham & Watkins expanded by 26,763 square feet to bring the firm’s total footprint there to 103,336 square feet. Landlord concessions have not meaningfully compressed, with buildout allowances still running $75-90/SF in older Class A and B product and $110-120/SF in newer or recently delivered buildings.