NAI Partners: Houston office outlook 1Q 2015NAI Partners: Houston office outlook 1Q 2015https://www.recenter.tamu.edu/news/newstalk-texas/?Item=11942015-04-28T08:33:00Z2015-04-24T09:12:00Z

HOUSTON - NAI Partners has released its first quarter 2015 Houston office market outlook report. The performance of Houston’s economy is strongly tied to the national economy and Texas rig counts, the latter a key indicator of our regional oil industry.

The national economy continues to show strength and growth in key areas, including jobs, ending of the government’s fiscal inputs, housing market picking up, bank credit flowing more freely, and yes, less expensive oil.

On the other hand, while reductions in Texas rig counts are slowing, they are nonetheless down from 877 a year ago to 456 in April.

Overall, the positive national economic outlook — combined with Houston’s boom in downstream refining, petrochemical business and construction — will counterbalance pullbacks in oil.

Demand for office space softened in first quarter 2015 to 1.6 million sf of total net absorption, down 35.5 percent year-over-year.

Office supply, as measured by availability and vacancy, increased in 1Q 2015.

Office 1Q 2015 Key Market Indicators
  1Q 2015 Y-O-Y
Asking rent: Class A $34.88 1.2%
Asking rent: Class B $21.48 3.3%
Net absorption (sf) 1,597,616 -35.5%
Leasing activity (sf) 2,666,025 -49.9%
Vacancy (%) 11.98 4.2%
Deliveries (sf) 4,240,504 61.9%
Construction (sf) 15,429,374 -7.1%
Inventory (sf) 257,240,982 4.3%
Inventory (# of bldgs.) 3,670 3.1%

Source: NAI Partners

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