|JLL: 4Q 2015 Houston office insight||JLL: 4Q 2015 Houston office insight||https://www.recenter.tamu.edu/news/newstalk-texas/?Item=11663||2016-01-12T06:00:00Z||2016-01-12T19:00:00Z|
HOUSTON - After a 370 basis point jump in vacancy year-over-year resulting in the first annual net occupancy loss since 2010, asking rental rates saw growth of 1.7 percent and several large leases were signed during the quarter.
Additionally, despite the infusion of over 8.7 million sf of new inventory, vacancy remained in the mid-teens. Whether silver linings such as these continue into 2016 remains to be seen, as oil prices are to remain under $50 a barrel and Houston’s job growth is forecasted to be weak.
This time last year, Houston accounted for nearly 20 percent of all the office buildings under construction within the U.S.; today that number is roughly half.
Looking ahead, with the inventory of direct and available sublease space growing, the likelihood of new office projects breaking ground in 2016 is slim, barring those tenants who opt for the build-to-suit route.
Prices for West Texas Intermediate oil, the benchmark for American oil production, fell by roughly 31 percent during 2015. With Houston so deeply tied to the energy sector, the impact has been far-reaching.
2015 remained a solid year for office sales transactions. By year-end, nearly $2 billion in building sales were inked in 38 transactions.
Notably, 4Q 2015 saw a few Class A buildings trade over $500 per-sf including 2200 Post Oak in the Galleria submarket ($527 per-sf) and 935 N. Eldridge in the Energy Corridor ($503 per-sf). Investors still have a steady appetite for well-tenanted office buildings in Houston despite volatility in the energy market.
|JLL||Houston-The Woodlands-Sugar Land||Office|| https://assets.recenter.tamu.edu/documents/mktresearch/Houston_Office_JLL.pdf|
Visit Houston Office Market Research to see the latest data.