HOUSTON - As larger blocks of sublease space hit the market throughout the year and downsizing continues, Houston’s overall office market could see a rocky 2016, according to JLL's first quarter 2016 Insight and Statistics.
Investors appear to have shifted strategy away from Class A and Trophy assets towards smaller Class B properties. These type of buildings generally have more secure tenant bases.
Only three building sales happened in the entirety of 1Q2016—all of Class B assets.
With an additional 2.7 million sf of new deliveries still to be leased, we expect market vacancy rates near 20 percent by year’s end.
Slightly higher energy prices could entice more companies to take advantage of this tenant-favorable market.
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