Houston Office Market: 6.8 Million SF of Positive Net Absorption in 2014

HOUSTON (Colliers International) – Houston’s office market had 2.2 million sf of positive net absorption in fourth quarter 2014, bringing the year-end total to 6.8 million sf, Colliers International reported in its latest quarterly market report.

Over 2.1 million sf of new inventory was delivered in the fourth quarter, bringing 2014 year-end delivered inventory to over 6.6 million sf.

The city’s office construction pipeline still contains over 17 million sf. Of that, 7.5 million sf is speculative development that is 28.8 percent preleased. The majority of the space is in the suburban submarkets and is scheduled to be completed this year.

The citywide average rental rate decreased slightly between quarters — 1.6 percent from $27.08 to $26.78 per sf — but is still 3.2 percent higher than it was a year ago. Both central business district and suburban Class-A average rental rates decreased over the quarter. However, both Class-B average rental rates rose.