Colliers 4Q 2014: Houston office 2.2M SF net absorption
HOUSTON – Houston’s office market recorded 2.2 million sf of positive net absorption fourth quarter 2014, bringing the year-end total to 6.8 million sf, according to a report released by Colliers International.
With over 2.1 million sf of new inventory delivered during 4Q, the year-end delivered inventory was over 6.6 million sf in 2014.
ExxonMobil is one of the key motivators. The company began moving into a portion of its new north campus headquarters, and Southwestern Energy moved into its new corporate headquarters just south of the ExxonMobil campus.
Houston’s office construction pipeline still contains over 17 million sf, and 7.5 million sf of that is speculative development which is 28.8 percent preleased. The majority of the space is located in the suburban submarkets and is scheduled to deliver in 2015.
The citywide average rental rate decreased 1.6 percent from $27.08 to $26.78 per sf between quarters, but it is still 3.2 percent higher than it was a year ago.
Both CBD and suburban Class A average rental rates decreased over the quarter, however, both Class B average rental rates rose.
| 3Q 2014 | 4Q 2014 | |
|
Citywide net absorption (SF) | 674,000 | 2.2 million |
|
Citywide avg. vacancy | 11.9% | 11.5% |
|
Citywide avg. rental rate | $27.08 | $26.79 |
|
Citywide delivered inventory (SF) | 1.5 million | 2.1 million |
| Class A Rental Rate | ||
| CBD | $42.36 | $42.01 |
| Suburban | $32.13 | $31.61 |
| Class A Vacancy | ||
| CBD | 9.9% | 8.6% |
| Suburban | 9.6% | 9.9% |
Read more at GlobeSt.
To see Colliers’ Houston Office Market Report 4Q 2014 with submarkets, click here.
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